Could investing in R&D help your business grow? Here you’ll find the latest R&D insights, RDTI guidance updates, and news about RDTI legislative developments.
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Minister agrees to extend RDTI application due dates
On 1 April 2021, refreshed guidance was published which clarifies eligible R&D activity expenditure for the R&D Tax Incentive (RDTI). The refreshed guidance is available on the Inland Revenue site Research and development tax incentive (ird.govt.nz).
The Minister of Revenue has agreed to extend due dates for years one and two (2019-20 and 2020-21) of the RDTI to give businesses more time to consider how the RDTI eligibility criteria applies to their activities and to make an application. The Minister will include a due date extension to 31 August in the next tax Bill for:
- year one (2019-20 income year) supplementary returns to 31 August 2021; and
- year two (2020-21 income year) general approvals and criteria and methodologies (CAM) approvals.
Amendments to give effect to these extensions will be included in the next tax Bill due to be introduced to Parliament in the second half of 2021. Businesses wanting to apply for the RDTI are encouraged to go to the “How to claim” section of the RDTI Hub or to contact Callaghan Innovation's RDTI specialists.
Late balance date payers, and COVID-19 extension due dates
If a taxpayer has a late balance date which results in their due date being later than 31 August 2021 then this later due date remains.
Where eligible, businesses can make use of the COVID-19 variation determination issued on 1 April 2021 which extends the due date for year one supplementary returns and year two CAMs. More information is available on Inland Revenue’s website Variation to sections 33E and 68CC(3) of the Tax Administration Act 1994 (ird.govt.nz).
Special rule for Growth Grant recipients with late balance dates in the 2020/2021 income year
Generally, if you receive a Callaghan Innovation Growth Grant for the whole, or a part, of the 2020/2021 year, you cannot claim the RDTI for that income year. The exclusion also applies where you are directly or indirectly controlled by or associated with a person receiving a Growth Grant. If the exclusion applies, it applies even to R&D activity and expenditure for which you have not received a Growth Grant. However, the exclusion may not apply for the entire 2020/2021 income year if you satisfy both the following:
- Your income year started after 1 April 2020 (you have a late balance date).
- You receive a Growth Grant for a part of the 2020-21 income year.
If both statements apply, you may be eligible to claim your eligible R&D expenditure for the part of the income year after your Growth Grant contract ends. Find out how to apportion your eligible R&D expenditure for the RDTI on page 64 of IR’s detailed guidance.
Filing date change for RDTI general approval applications
If you are filing a general approval application relating to the R&D Tax Incentive (RDTI) for the 2020/2021 income tax year, you can now have more time to apply – until the 7th day of the fifth month after the end of the first income year.
The change is for a situation where you could not apply on time because the COVID-19 outbreak and its effects disrupted any of the following:
- Planning or doing eligible research and development
- Appropriately obtaining necessary information
- Getting advice
The change is effective from 1 September 2020 to 30 September 2021.
Broader RDTI refundability rules announced
The Government has passed changes to the R&D Tax Incentive (RDTI) rules under urgency to provide extra cash support to R&D-performing businesses, to help support them through the disruption caused by COVID-19. A new RDTI refundability fact sheet is now available.
R&D Tax Incentive set to boost business R&D spend in New Zealand
The R&D Tax Incentive (RDTI) is the Government’s billion-dollar flagship programme to encourage more businesses to invest in R&D.
Why is R&D investment so important for New Zealand’s economy? How does the RDTI benefit businesses that are doing R&D? Megan Woods (Minister of Research, Science and Innovation) and Revenue Minister Stuart Nash outline the rationale behind the RDTI initiative.
They also discuss their plans to introduce a comprehensive form of refundable tax credits in 2020/2021 to benefit more startups and loss-making businesses.
Risk versus reward: the business case for investing in R&D
New Zealand businesses are not investing as much time and resource in research and development (R&D) as other countries.
Why? The reason seems to be that many Kiwi companies fear the risk of undertaking R&D.
Callaghan Innovation’s CEO Vic Crone outlines the significant long-term benefits of R&D investment and why it’s time more New Zealand businesses re-evaluate their commitment to R&D spending.
Introducing the R&D Tax Incentive
Hear CEOs from Biotelliga, 1Centre, Methven and Fraser Engineering talk about the importance of R&D and its contribution to their ongoing business growth. The RDTI aims to help R&D-focussed businesses commit more time and resource to their R&D endeavours.