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Tax Administration Act 1994

Information, record-keeping, and returns - Returns - Research and development

68CB: Research and development tax credits: general approval

You could also call this:

"Getting approval for tax credits on research and development projects"

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You can get approval for research and development tax credits. The Commissioner approves your activities if you apply correctly. You must tell the truth and follow the conditions. You apply to the Commissioner for approval. You say what activities you want approved and for which years. You give the Commissioner any other information they need. The Commissioner decides what activities to approve. They tell you what they approve and for which years. They also tell you about any conditions. If the Commissioner wants to decline your application, they tell you first. You can ask for a change to your approval if things change. The Commissioner decides if they accept the change. The Commissioner's approval is binding, meaning they must follow it. You can find more information in the Income Tax Act 2007, specifically subpart LY and section LY 5(1)(ab)(i) and section LY 5(1)(ab)(ii).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS200910.

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Part 3Information, record-keeping, and returns
Returns: Research and development

68CBResearch and development tax credits: general approval

  1. For the purposes of section LY 3(1)(d) of the Income Tax Act 2007, a person’s research and development activities are approved for the income year, if the Commissioner approves the activities, as provided by subsections (2) to (7), and—

  2. the person’s application for approval does not contain a material omission or misrepresentation; and
    1. the person complies with any conditions in the Commissioner’s approval; and
      1. there is no material change in the provisions in subpart LY of that Act and any associated provisions.

          1. The Commissioner may, in accordance with this section, approve a person’s research and development activities for an income year (the first income year), the income year immediately before (the prior year), and up to 2 income years immediately after, if the person makes an application in accordance with subsection (3) on or before the 7th day of the 2nd month after the end of the first income year. For a prior year, the Commissioner may only approve supporting research and development activities described in section LY 5(1)(ab)(i) of the Income Tax Act 2007.

          2. A person must apply to the Commissioner for approval in the form prescribed by the Commissioner, including—

          3. the activities the person wants the Commissioner to approve; and
            1. the income years for which approval is sought; and
              1. any other information required by the Commissioner.

                1. If a person’s research and development activities materially change during the period of an approval, and they want the change to be covered by the approval, they must apply to the Commissioner for a variation of the approval by the deadline in subsection (7) or (7B), as applicable.

                2. The Commissioner may only approve a person’s activities to the extent to which, in the opinion of the Commissioner, the relevant activity is a core research and development activity or a supporting research and development activity.

                3. If the Commissioner approves a person’s activities for an income year, the Commissioner must notify the person what activities of the person the Commissioner approves of as core research and development activities or supporting research and development activities, for which income years, and any conditions upon which the approval is made.

                4. The Commissioner must notify the person of the intention to decline the application before the application is declined.

                5. The Commissioner may vary an approval, upon application, if the variation application meets the requirements in subsection (1)(a), the variation applied for meets the requirements of subsection (4), and the application is made on or before the 7th day of the 2nd month after the end of the relevant income year. If the Commissioner accepts the variation, then the Commissioner must notify the person in accordance with subsection (5).

                6. The Commissioner may vary an approval, upon application, to the extent to which the variation application relates solely to a supporting research and development activity for the income year immediately after the relevant income year, as provided by section LY 5(1)(ab)(ii) of the Income Tax Act 2007, if the variation application meets the requirements of subsection (1)(a) of this section, the variation applied for meets the requirements of subsection (4) of this section, and the application is made on or before the 7th day of the 14th month after the end of the relevant income year. If the Commissioner accepts the variation, then the Commissioner must notify the person in accordance with subsection (5) of this section.

                7. The Commissioner may vary an approval, upon application, to the extent to which the variation application relates solely to a supporting research and development activity for the 2019–20 income year, if the variation application meets the requirements of subsection (1)(a) of this section, the variation applied for meets the requirements of subsection (4) of this section, and the application is made on or before 31 August 2022. If the Commissioner accepts the variation, then the Commissioner must notify the person in accordance with subsection (5) of this section.

                8. The Commissioner’s approval under this section binds the Commissioner in accordance with the provisions of this section.

                Notes
                • Section 68CB: replaced, on , by section 45 (and see section 38 for application) of the Taxation (Research and Development Tax Credits) Act 2019 (2019 No 15).
                • Section 68CB: deadline to submit application for approval, or variation of approval, extended to 31 March 2023, on , by clause 4(2) (and see clauses 4(1) and 5 for application) of the Tax Administration (Research and Development Tax Credit Deadlines for Taxpayers Affected by Weather Events) Order 2023 (SL 2023/11).
                • Section 68CB(1)(c): amended (with effect on 1 April 2020), on , by section 183(1) (and see section 183(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                • Section 68CB(1)(d): repealed (with effect on 1 April 2020), on , by section 183(2) (and see section 183(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                • Section 68CB(2): amended (with effect on 1 April 2020), on , by section 195(1) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                • Section 68CB(2): amended (with effect on 1 April 2020), on , by section 195(2) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                • Section 68CB(3B): inserted (with effect on 1 April 2020), on , by section 183(3) (and see section 183(4) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                • Section 68CB(7B): inserted (with effect on 1 April 2020), on , by section 195(3) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                • Section 68CB(7C): inserted (with effect on 1 April 2020), on , by section 195(3) of the Taxation (Annual Rates for 2021–22, GST, and Remedial Matters) Act 2022 (2022 No 10).
                • Section 68CB(8): inserted, on , by section 206(1) (and see section 206(2) for application) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).