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New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 33: Scientific research

You could also call this:

“Tax deductions for scientific research expenses”

You can get money back (a deduction) for money you spend on scientific research if you do the research to earn income that can be taxed. This applies to most of the money you spend on the research.

However, you can’t get this deduction for money you spend on things that aren’t created by the research. You also can’t get it for things that lose value over time (depreciation) if you’re already getting money back for that loss in value, or if you would have gotten money back but didn’t keep good enough records.

This rule adds to the general permission for deductions and overrides the rule about capital expenditure. Other general rules about deductions still apply.

If you want to know more about how this compares to older versions of the law, you can check the previous version of this rule.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513658.

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DB 34: Research or development, or

“Tax deductions for research and development spending”

Part D Deductions
Specific rules for expenditure types

DB 33Scientific research

  1. A person is allowed a deduction for expenditure they incur in connection with scientific research that they carry on for the purpose of deriving their assessable income.

  2. Subsection (1) does not apply to expenditure that the person incurs on an asset that—

  3. is not created from the scientific research; and
    1. is an asset for which they have an amount of depreciation loss for which—
      1. they are allowed a deduction; or
        1. they would have been allowed a deduction but for the Commissioner’s considering that incomplete and unsatisfactory accounts were kept by or for them.

        2. This section supplements the general permission and overrides the capital limitation. The other general limitations still apply.

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