In the coalition agreements after the 2017 election, the Labour-led New Zealand government committed to the goal of increasing business research and development (R&D) expenditure to two per cent of GDP over ten years.
As part of their work towards achieving that goal, the government today released a Research and Development Tax Incentive Discussion Document for public consultation.
The government recognises that growing R&D is a key lever in diversifying the New Zealand economy and creating new industries, businesses, and highly skilled jobs. While acknowledging sustained increases in government investment will be important, the government’s aim is to increase the contribution from the private sector, specifically in businesses undertaking R&D.
The key feature of the government’s mechanism for providing an R&D tax incentive is a tax credit of 12.5% on eligible expenditure to businesses doing R&D in New Zealand. The credit will be available for eligible expenditure incurred from 1 April 2019. Notably, this is less than the 15% tax credit that was introduced towards the end of the last Labour–led government’s term, and subsequently abolished.
The Discussion Document is available on the Ministry of Business, Innovation and Employment’s website at http://www.mbie.govt.nz/RDincentive, which also explains how to make a submission.
AJ Park has been part of New Zealand’s innovation ecosystem for over 125 years, helping companies and individuals identify, develop, protect, commercialise, manage, and enforce their IP rights in New Zealand, Australia, and throughout the world. We encourage innovative businesses and individuals who wish to further shape that ecosystem to make a submission.
