New RDTI guidance released on ‘Eligible R&D Activity’. Read more

The R&D Tax Incentive (RDTI): What you need to know.

The RDTI is a new approach to R&D funding in New Zealand. It's a tax credit that reduces the income tax your business needs to pay. It opens up opportunities to explore the unknowns in your industry to create new innovations.

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Introduction to the R&D Tax Incentive

The RDTI is a 15% tax credit on the money you invest in eligible Research and Development (R&D) in New Zealand. There are criteria and processes to determine whether the R&D you do is eligible.
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Why do R&D?

For the purposes of the RDTI, there is a specific statutory definition of ‘R&D’ which is not the same as the commercial, engineering or accounting definitions. The tax credit is not just for scientific research but also for development activity that meets the eligibility criteria.

There are clear criteria around what does and doesn’t qualify as eligible R&D for claiming the RDTI and these should be considered in detail before launching a project.

R&D allows businesses to explore new ways to create competitive advantage - and can produce a range of results including new systems and processes, or innovations in products and technology.

R&D allows businesses to explore new ways to create competitive advantage - and can produce a range of results including new systems and processes, or innovations in products and technology. Find out the definition of the types of R&D that qualify for the RDTI.

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How the Government can support your R&D

For the purposes of the RDTI, there is a specific statutory definition of ‘R&D’ which is not the same as the commercial, engineering or accounting definitions. The tax credit is not just for scientific research but also for development activity that meets the eligibility criteria.

There are clear criteria around what does and doesn’t qualify as eligible R&D for claiming the RDTI and these should be considered in detail before launching a project.

A wide range of R&D support is available to New Zealand businesses, whether you’re just starting out or already a significant R&D investor. Explore some of the options available to help you achieve your innovation goals.

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What is the RDTI and is it right for me?

For the purposes of the RDTI, there is a specific statutory definition of ‘R&D’ which is not the same as the commercial, engineering or accounting definitions. The tax credit is not just for scientific research but also for development activity that meets the eligibility criteria.

There are clear criteria around what does and doesn’t qualify as eligible R&D for claiming the RDTI and these should be considered in detail before launching a project.

The RDTI is designed to encourage a wide range of New Zealand businesses to undertake more R&D. Businesses spending between $50,000 and $120 million a year on R&D may be eligible to claim, and businesses that spend under $50,000 per annum may still claim if they work with an approved R&D provider (ARP). There are also provisions for businesses wishing to spend more.

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What R&D activities are eligible for the RDTI?

For the purposes of the RDTI, there is a specific statutory definition of ‘R&D’ which is not the same as the commercial, engineering or accounting definitions. The tax credit is not just for scientific research but also for development activity that meets the eligibility criteria.

There are clear criteria around what does and doesn’t qualify as eligible R&D for claiming the RDTI and these should be considered in detail before launching a project.

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What R&D spend applies to the RDTI?

For the purposes of the RDTI, there is a specific statutory definition of ‘R&D’ which is not the same as the commercial, engineering or accounting definitions. The tax credit is not just for scientific research but also for development activity that meets the eligibility criteria.

There are clear criteria around what does and doesn’t qualify as eligible R&D for claiming the RDTI and these should be considered in detail before launching a project.

There are some rules around what types of R&D expenditure are eligible for claiming the RDTI.

There are some rules around what types of R&D expenditure are eligible for claiming the RDTI.

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How do I prepare to claim the RDTI?

For the purposes of the RDTI, there is a specific statutory definition of ‘R&D’ which is not the same as the commercial, engineering or accounting definitions. The tax credit is not just for scientific research but also for development activity that meets the eligibility criteria.

There are clear criteria around what does and doesn’t qualify as eligible R&D for claiming the RDTI and these should be considered in detail before launching a project.

You’ll need to set up some processes and parameters around the R&D activity you plan to do. You’ll outline what your objective is, and then by logging the R&D journey, including the costs as you progress, you'll create some of the evidence needed to satisfy Inland Revenue's record-keeping requirements. The RDTI is filed in myIR on Inland Revenue's website.

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What are the steps involved to claim?

For the purposes of the RDTI, there is a specific statutory definition of ‘R&D’ which is not the same as the commercial, engineering or accounting definitions. The tax credit is not just for scientific research but also for development activity that meets the eligibility criteria.

There are clear criteria around what does and doesn’t qualify as eligible R&D for claiming the RDTI and these should be considered in detail before launching a project.

The R&D Tax Incentive (RDTI) is a tax credit, so it must be claimed through Inland Revenue in your income tax return. You’ll also need to file a separate R&D supplementary return. The process will be linked to your myIR account, so that it is easy to find and manage in one place. The process varies between the 2019/2020 income year and any later years. There is also a different claim process if you are eligible to be recognised as an RDTI Significant Performer. On this page you can learn about the claim process that is right for you.

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