“Activities not counted as research and development for tax purposes”
This schedule lists activities that are not considered research and development (R&D) for tax purposes. These activities include things done outside of New Zealand, buying or selling land (unless it’s only for R&D facilities), and dealing with intellectual property. It also excludes searching for minerals or energy sources, and research in social sciences, arts, or humanities.
The list continues with activities like market research, quality control, making things look nicer, and collecting routine information. It also doesn’t count legal work related to patents, following rules and standards, or studying how well a business is run.
Lastly, the schedule says that copying existing products or processes, and activities done before starting production (like showing something will sell well or preparing for manufacturing) are not considered R&D. This helps you understand what kinds of work the government doesn’t count as research and development when it comes to taxes.
Schedule 23: Meaning of permanent establishment, or
“What counts as a fixed business location for tax purposes”
22Proscribed R&D activities
The following table is small in size and has 2 columns. In the table, the first column gives the number of the row. The second column describes the proscribed R&D activity.
1
An activity performed outside of New Zealand.
2
Acquiring or disposing of land, and related activities, except if the land is used exclusively for housing research or development facilities.
3
Acquiring, disposing of, or transferring intangible property, core technology, intellectual property, or know-how, and related activities (for example, drafting sale and purchase agreements for patents).
4
Prospecting for, exploring for, or drilling for, minerals, petroleum, natural gas, or geothermal energy.
5
Research in social sciences, arts, or humanities.
6
Market research, market testing, market development, or sales promotion, including consumer surveys.
7
Quality control or routine testing of materials, products, devices, processes, or services.
8
Making cosmetic or stylistic changes to materials, products, devices, processes, or services.
9
Routine collection of information.
10
Commercial, legal, and administrative aspects of patenting, licensing, or other activities.
11
Activities involved in complying with statutory requirements or standards.
12
Management studies or efficiency surveys.
13
Reproduction of a commercial product or process by a physical examination of an existing system or from plans, blueprints, detailed specifications, or publicly available information.
14
Pre-production activities, such as a demonstration of commercial viability, tooling-up, and trial runs.
