Depreciation loss for an item of depreciable property to the extent to which the depreciable property is used in performing a research and development activity.

Expenditure or loss, including amounts deductible under sections DB 49 and DB 50, that is not for employees and is incurred in acquiring goods and services that are not depreciable property, to the extent to which—

Amounts for employees, to the extent to which the employee’s employment relates to performing a research and development activity.

Amounts that, but for this clause, are eligible research and development expenditure under section LY 5, to the extent to which the amounts, together with associated persons’ eligible research and development expenditure returned by them in their research and development supplementary return, are greater than $120 million or their approved research and development cap, as the case may be.

Expenditure or loss incurred in acquiring property that is depreciable property or that would be depreciable in the absence of an election under section EE 8, but ignoring expenditure or loss incurred in making the property.

Expenditure or loss, other than amounts for employees or contractor labour in relation to core research and development activities, to the extent to which the expenditure or loss contributes to the cost of tangible depreciable property, or tangible property that would be depreciable in the absence of an election under section EE 8, but ignoring expenditure or loss for property if the property is used solely in performing a research and development activity, is intended to be used in the future solely in performing a research and development activity, and the expenditure or loss is for a core research and development activity.

Expenditure or loss, other than amounts for employees or contractor labour in relation to core research and development activities, incurred by—

Expenditure or loss is ignored for the purposes of this clause to the extent to which the expenditure or loss contributes to the cost of tangible depreciable property, if the property is used solely in performing a research and development activity, is intended to be used in the future solely in performing a research and development activity, and the expenditure or loss is for a core research and development activity.

Depreciation loss for an item of depreciable property to the extent to which the item’s cost is eligible research and development expenditure under section LY 5.

Depreciation loss for an item of depreciable property, if the item is in a pool of depreciable property and an item in the pool is not used solely in performing a research and development activity.

Depreciation loss for an item of depreciable property under sections EE 11(2) to (6), and EE 39.

Depreciation loss for an item of depreciable property acquired from an associated person, if the associate has used the item for a research and development activity, to the extent to which the depreciation loss relates to consideration paid or payable to the associated person for the acquisition of the item in excess of the associate’s adjusted tax value for the property at the time of acquisition.

Amounts for goods or services, other than a right to use property, acquired directly or indirectly from an associated person to the extent to which the consideration paid or payable to the associated person for the goods or services is more than the lowest cost of the goods and services to an associate.

Amount for a right to use property acquired from an associate, to the extent to which the consideration paid or payable to the associate for the goods or services that relate to the right is more than the market value of the right.

Expenditure or loss to acquire land.

Expenditure under a financial arrangement.

A deduction under sections DB 5 to DB 15 (which relate to financing and financial arrangement adjustments).

Expenditure or loss incurred in determining a person’s entitlement or lack of entitlement to a research and development tax credit.

Expenditure or loss incurred in performing corporate governance activities.

Expenditure or loss to purchase, lease, or otherwise acquire an interest in intangible property other than software.

Expenditure or loss to purchase, lease, or otherwise acquire software that is bespoke or customised, or is not widely commercially available.

Amounts that, but for this clause, are both eligible research and development expenditure under section LY 5 and internal software development expenditure, to the extent to which the amounts, together with associated persons’ amounts that are both eligible research and development expenditure and internal software development expenditure, returned by them in their research and development supplementary return, are greater than $25 million. For the purposes of this clause only, sections HB 1 and HG 2 (which relate to entity transparency) are ignored and the person’s partnership or look-through company is substituted as the relevant person.

Expenditure or loss in relation to goods and services, to the extent to which the consideration paid or payable for the goods and services is greater than market value consideration.

Gifts.

Expenditure or loss that is ineligible technology expenditure.

Expenditure or loss for plant, machinery, or materials to commercialise research and development activities’ results, including preproduction expenditure or loss.

Expenditure or loss incurred in decommissioning.

Expenditure or loss incurred in remediating land.

Expenditure or loss that is a precondition to, subject to the terms of, or required by, a grant made by the Crown or a local authority. However, this expenditure does not include an amount funded through a loan made under the research and development loan scheme. Nor does it include an amount related to a Callaghan Innovation project grant, to the extent to which the amount exceeds the estimated cost of the project specified in the contract for the Callaghan Innovation project grant. Nor does it include an amount spent by a recipient of a New to R&D Grant, to the extent to which the amount exceeds the amount covered by the New to R&D Grant contract. Nor does it include an amount related to an RDTI transition support payment.

Expenditure or loss incurred in acquiring or producing goods, including expenditure or loss for energy (inputs), to the extent to which the expenditure or loss does not exceed the market value of goods that result from the total inputs being used in, or subject to, a process or transformation.

Expenditure or loss to the extent to which a country or territory outside New Zealand allows a credit of tax (a foreign credit) of a similar nature to the research and development tax credit for the expenditure or loss, and the person receives the foreign credit for the expenditure or loss.

Expenditure or loss that is not for an approved research provider performing a research and development activity on behalf of the person, if section LY 4(1)(b) applies, and section LY 4(1)(a) does not apply.