What is the RDTI and is it right for me?
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Is the RDTI right for me?
If your business is using a systematic approach with an aim to both resolve scientific or technological uncertainty and create new knowledge or things, the RDTI may be right for you.
What do I get?
The RDTI offers most New Zealand-based businesses a 15% tax credit on money spent on R&D in New Zealand. You can use the credit to reduce your income tax bill. It is generally available to businesses who spend more than $50,000 on eligible R&D in a given year, but if you spend less than $50,000 you might be eligible if you use an approved research provider for your R&D. You can be eligible whether your business is in profit or loss. Special rules apply to allow you to include some overseas R&D in your claim if you meet certain criteria.
The main features


R&D Tax Incentive
R&D Tax Incentive (RDTI)
- The RDTI offers a 15% tax credit on eligible R&D expenditure.
- It applies across a wide range of industry sectors and to a number of eligible R&D activities.
- Eligible R&D expenditure between $50,000 and $120 million per year can be claimed (some exceptions apply).
- A limited form of refund ability applies for 2019/2020, mainly for smaller businesses that are R&D intensive and pay little or no income tax. A more comprehensive policy will be in place from 2020/2021.
- The Government will invest $1 billion into the RDTI over the next four years to encourage New Zealand businesses to spend more on R&D.
- The RDTI can be claimed alongside the R&D loss tax credit. It can also be claimed alongside the other R&D funding options listed below, but not for the same expenditure or for required co-funding.
- The RDTI is jointly administered by Inland Revenue and Callaghan Innovation. Visit www.rdti.govt.nz
Getting Started Grants
A Getting Started Grant is for businesses that are early stage or new to R&D.
- It offers up to $5,000 for launching an R&D project and navigating roadblocks to commercialisation.
- It covers 40% of costs for R&D conducted in New Zealand.
- A one-off payment is provided at the end of the project.
- You must be a company, limited partner or Māori incorporation/trust.
- Visit Callaghan Innovation for more.
Project Grant
A Project Grant covers up to 40% of eligible R&D project costs for businesses new to, or expanding, R&D in New Zealand.
- It’s available if you have been performing R&D for less than three years, or have spent less than $800,000 on average each year for the last three years.
- You will receive payment in monthly or quarterly arrears.
- You must be a company, limited partner or Māori incorporation/trust.
- Visit Callaghan Innovation for more.
- NOTE: If you have a Callaghan Innovation Project Grant then you are not able to claim the R&D Tax Incentive (RDTI) on any expenditure relating to the R&D activities funded by the Project Grant. Read the Fact Sheet for Project Grant recipients for further details.
R&D loss tax credit
R&D loss tax credit
- Up to 28% of a business’ tax losses from eligible R&D expenditure may be cashed out (refunded) instead of carrying forward to the next income year.
- A maximum allowable value of $476,000 applies in the 2019/2020 tax year.
- You can claim the R&D loss tax credit with the RDTI for the same expenditure.
- Visit Inland Revenue for more.
Student Grants
An R&D Experience Grant allows you to hire a tertiary student to support your R&D work during their summer break.
- The student must be NZQA level 7-10 in science, technology, engineering, design or business in New Zealand. They must not be employed by the business or have undertaken more than two R&D Experience Grants there before.
- The business receives funding of $8,460 plus GST for 400 hours of full time work.
- It’s available if you have an active R&D programme and are a company, limited partner or Māori incorporation/trust.
- Visit Callaghan Innovation for more.
An R&D Fellowship provides businesses with advanced research at PhD or Masters level to help solve an R&D problem.
- The research is undertaken on site at both the business and the student’s university, and is jointly supervised.
- Students receive a stipend (maximum $26,000 p.a.) and a fee (of $4,500 p.a.) is paid to the university to support their hosting role.
- Funding is for research activity only, for a maximum of three years for PhD students and two years for Masters students.
- The student must be enrolled at research Masters or PhD level in science, technology, engineering, design or business in New Zealand.
- It’s available to businesses that have an active R&D programme. The business must be a company, limited partner or Māori incorporation/trust.
- Visit Callaghan Innovation for more.
An R&D Career Grant provides funding for an internship. It allows a PhD or Masters graduate to gain six months experience helping solve an R&D problem.
- The business receives funding for the first six months of the student’s annual salary up to $30,000 for a Masters graduate and up to $35,000 for a PhD graduate.
- The student must be about to complete, or have completed, a degree in science, technology, engineering, design or business in New Zealand.
- They must have completed their course of study less than 12 months ago and cannot already be employed in the industry.
- You must have an active R&D programme and be a company, limited partner or Māori incorporation/trust.
- Visit Callaghan Innovation for more.









If your business is in a tax loss position or you do not have enough income tax to pay to use up all of your R&D tax credits, you may now be eligible for refundable R&D tax credits. This will help smaller businesses with cash-flow challenges. If you’re eligible for refundability, you can receive R&D tax credit refunds up to a cap based on labour-related taxes. Read our How-To Guide to learn more about RDTI refundability.
Entity eligibility
You’re eligible to apply for the RDTI if you:
- perform a core R&D activity in New Zealand yourself or through an R&D contractor in New Zealand, and
- conduct business through a fixed establishment in New Zealand.
The RDTI is intended to reward businesses investing in R&D, so it excludes R&D contractors whose business is doing R&D for others. Find more information on page 29 of Inland Revenue's detailed RDTI guide.
To be eligible to claim:
- you must own the results of your R&D, or
- another company in your corporate group must own the results of the R&D and must also be tax resident of New Zealand or a jurisdiction with which New Zealand has a double tax agreement, or
- your joint venture or partnership (if you are in one) must own the results of the R&D.
Partnerships, look-through companies and joint ventures are eligible for the incentive if they meet certain conditions. Refer to page 31 of the detailed RDTI guide for more information.
Ineligible entities
You cannot claim the RDTI if you:
- receive – or are directly or indirectly controlled by, or associated with – a person receiving a Callaghan Innovation Growth Grant for the same income year;
- are a Crown Research Institute, district health board or tertiary education organisation, an associate of one of these organisations, or are majority-owned or effectively controlled by one of these organisations or their associates;
- are performing the R&D activity on behalf of another person who carries on a business through a fixed establishment in New Zealand, and/or;
- are a member of a joint venture, a partner in a partnership, or an owner of a look-through company, and not a New Zealand tax resident for the whole tax year.
A fixed establishment is a fixed place of business in which you carry on substantial business, like a shop, factory or workshop. You are likely to have a fixed establishment in New Zealand if you're doing core R&D yourself in New Zealand (rather than through a contractor).