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Income Tax Act 2007

Tax credits paid in cash - Tax credits for R&D tax losses

MX 4: R&D loss tax credits

You could also call this:

“Tax credits for research and development losses”

You can get a tax credit for research and development (R&D) losses. The amount of credit you can get depends on the tax year and is limited by a few factors.

For different tax years, there are maximum amounts you can claim:

For the 2015-16 tax year, you can claim up to $500,000 times the basic company tax rate. For the 2016-17 tax year, it’s up to $800,000 times the basic company tax rate. For the 2017-18 tax year, it’s up to $1,100,000 times the basic company tax rate. For the 2018-19 tax year, it’s up to $1,400,000 times the basic company tax rate. For the 2019-20 tax year, it’s up to $1,700,000 times the basic company tax rate. For the 2020-21 tax year and later, it’s up to $2,000,000 times the basic company tax rate.

Your tax credit will be the smallest amount of:

The maximum amount for your tax year (as listed above)
Your net loss for the tax year times the basic company tax rate
Your total R&D spending for the income year times the basic company tax rate
1.5 times your total R&D labour costs for the income year (as described in section MX 3(3)(a)) times the basic company tax rate

When you claim an R&D loss tax credit, Section 70C of the Tax Administration Act 1994 applies to your claim.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6767143.

Topics:

Money and consumer rights > Taxes

Business > Industry rules

MX 3: Wage intensity criteria, or

“How much of your wage spending must be on R&D to qualify for tax credits”

MX 5: Cancellation of R&D tax losses, or

“How cancelled R&D tax loss credits affect your yearly tax losses”

Part M Tax credits paid in cash
Tax credits for R&D tax losses

MX 4R&D loss tax credits

For a tax year, the person has a tax credit equal to the least of the following:
$500,000 multiplied by the basic tax rate for a company, if the tax year is the 2015–16 tax year:
$800,000 multiplied by the basic tax rate for a company, if the tax year is the 2016–17 tax year:
$1,100,000 multiplied by the basic tax rate for a company, if the tax year is the 2017–18 tax year:
$1,400,000 multiplied by the basic tax rate for a company, if the tax year is the 2018–19 tax year:
$1,700,000 multiplied by the basic tax rate for a company, if the tax year is the 2019–20 tax year:
$2,000,000 multiplied by the basic tax rate for a company, if the tax year is the 2020–21 or later tax year:
the person’s net loss for the tax year multiplied by the basic tax rate for a company:
the person’s total R&D expenditure, incurred in the income year corresponding to the tax year, multiplied by the basic tax rate for a company:
1.5 multiplied by the person’s total R&D labour expenditure, incurred in the income year corresponding to the tax year and described in section MX 3(3)(a), multiplied by the basic tax rate for a company.

Section 70C of the Tax Administration Act 1994 applies for an R&D loss tax credit.

Notes

Section MX 4: inserted (with effect on 1 April 2015 and applying for income years beginning on or after that date), on 24 February 2016, by section 213(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
Section MX 4(1) heading: inserted, on 29 March 2018 (with effect on 1 April 2015), by section 166 of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).