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Income Tax Act 2007

Tax credits and other credits - Research and development tax credits

LY 9: Orders in Council

You could also call this:

“The Governor-General can change tax credits with a special order, after getting advice from ministers and others.”

The Governor-General can make changes to tax credits by Order in Council. You need to know that this is done on the recommendation of the Minister of Revenue and the Minister of Science, Innovation, and Technology. They can add or remove activities or expenses from schedules like schedule 21 and schedule 21B.

Before making changes, the Ministers must talk to people they think are suitable and consider things like the purpose of the tax credit regime, as stated in section LY 1(1). They also think about how the changes will affect new scientific knowledge and the country’s finances.

Any changes made will apply from the next income year and will last for three years. An Order in Council is a type of secondary legislation, which you can read more about in Part 3 of the Legislation Act 2019.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS199259.

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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"

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LY 10: Evaluation, or

"Checking how well the research and development tax credit is working"

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 Science, Innovation, and Technology,—

  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(2): amended (with effect on 27 November 2023), on , by section 108 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                  • 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).