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LY 8: Carry forward for remaining research and development tax credits
or “Unused R&D tax credits can be carried forward to the next year, with special rules for companies”
You could also call this:

“Governor-General can make temporary changes to R&D tax credit rules”

The Governor-General can make changes to the research and development tax credit rules. These changes help keep the rules working as they should. The Governor-General can do this by adding or removing activities or expenses from special lists.

Before making changes, the Minister of Revenue and the Minister of Research, Science, and Innovation must agree. They need to talk to the right people first and think about how the changes will affect:

  • The main goal of the tax credit
  • Creating new scientific or technological knowledge
  • How much money it will cost

Any changes they make will start in the next tax year. The changes only last for three years.

When the Governor-General makes these changes, it’s called an Order in Council. This is a type of law that must be made public for everyone to see.

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Next up: LY 10: Evaluation

or “Minister to report on effectiveness of research and development tax credit system”
Next

Part L Tax credits and other credits
Research and development tax credits

LY 9Orders in Council

  1. The purpose of subsection (2) is to provide a power to maintain the intent of the research and development tax credit regime in accordance with its stated purpose in section LY 1(1).

  2. The Governor-General may, by Order in Council made on the joint recommendation of the Minister of Revenue and the Minister of Research, Science, and Innovation,—

  3. add the description of an activity or of an expenditure or loss, as applicable, to—
    1. schedule 21:
      1. schedule 21B:
      2. remove the description of an activity or of an expenditure or loss, as applicable, from—
        1. schedule 21:
          1. schedule 21B.

          2. Before making a recommendation referred to in subsection (2), the Ministers must be satisfied that—

          3. they have consulted with persons they consider to be appropriate in light of the relevant addition or removal; and
            1. they have had regard to—
              1. the purpose in section LY 1(1) and maintaining the intent of the definitions of research and development activity and eligible research and development expenditure; and
                1. the effect of the recommendation on the creation of new scientific or technological knowledge; and
                  1. the fiscal impact of the recommendation.

                  2. An addition or removal by Order in Council under this section must apply for the income year corresponding to the tax year after the tax year in which it is made, and subsequent income years.

                  3. An Order in Council under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

                  4. An Order in Council under this section expires on the date that is 3 years after the last day of the tax year that the Order first applies for.

                  Notes
                  • Section LY 9: inserted, on , by section 10 (and see section 3 for application) of the Taxation (Research and Development Tax Credits) Act 2019 (2019 No 15).
                  • Section LY 9(4B) heading: inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
                  • Section LY 9(4B): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
                  • Section LY 9 list of defined terms research and development tax credit: inserted (with effect on 1 April 2019), on , by section 132 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                  • Section LY 9 list of defined terms research and development tax credits: repealed (with effect on 1 April 2019), on , by section 132 of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).