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Research & Development (R&D) Loss Tax Credit

April 18, 2016

The Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 has been enacted and introduces the R&D loss tax credit initiative. The Government wants to encourage business innovation and recognises that research and development is a key element in this process.

For income years beginning on or after 1 April 2015, you may be able to cash out their R&D losses if their company:

  • is in a tax loss position,
  • is a resident in New Zealand, and
  • expenditure on R&D salary and wages is 20% or more of their total salary and wages.
  • IRD are working to generate awareness about this tax credit amongst the R&D community and wider business community from 4 April 2016. They will primarily do this through targeted online advertising, which will direct people to a short web page. This web page will explain what the new credit is at a high level and the steps people can take to determine if they are eligible and apply.

    For more information now, go to www.ird.govt.nz (search keyword: R&D) and if you think this may apply to you, contact us to discuss


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