Incentives & R&D

The New Zealand Government has a target of raising the total amount of R&D performed in New Zealand to 2% of gross domestic product by 2028. This has led to a new R&D tax incentive that offers a 15% tax credit for qualifying expenditure on eligible R&D activities, to help lower the cost to businesses in performing R&D. A core R&D activity is defined as an activity that: Has a purpose of creating new knowledge or new or improved products/processes/services, and Has the intent of resolving scientific or technological uncertainty, and Is conducted in a systematic way. This definition is designed to allow companies from all industries, ranging from agritech, to software, manufacturing, food and drink and electronics to benefit from the regime if the above definition is met. A key favourable feature of the regime is the ability to obtain a cash pay-out of the benefit if the claimant is in a tax loss position in many cases. This includes options to receive the cash benefit during the year.

Deloitte can assist clients with R&D claim preparation through our proven methodology including: initial scoping workshops to determine the potential benefit; review of systems suitability; review of technical eligibility; analysis of eligible expenditure; claim preparation, including general approval and significant performer pre-approval applications; and submission to Inland Revenue. A key feature of the regime is its move to a pre-approval basis, which accelerates the deadlines for lodging key aspects of R&D tax incentive claims. It is therefore important that claims are progressed in a timely manner. Identifying qualifying R&D activities for the R&D tax incentive can be challenging for both large and small businesses. This is due to the underlying technicalities and judgment needed to apply the definition to meet the information requirements of Inland Revenue. Our advice can help to take the complexity out of making R&D claims and find value by looking deep into your business, using expert practitioners backed up by a technology enabled approach. This can help our clients to get more value out of the R&D tax incentive

Whilst in many cases existing records are suitable to support a claim, early assessment of its suitability simplifies the claim process and ensures the full scope of R&D is identified. Deloitte can help clients evaluate existing systems to determine how best to utilise them to track R&D activities.

In addition to the R&D tax incentive, there are also other grant funding alternatives that may be available to businesses undertaking R&D or looking to undertake R&D. Deloitte can assist clients with determining what other innovation funding alternatives suit their business best.

Deloitte combines tax technical expertise with industry experience from a range of sections such as software, engineering, biochemistry and more to ensure that all aspects of an incentive claim are understood and considered. Our specialist R&D team has a range of experience from practicing in New Zealand and internationally, both in the UK and Australia. Deloitte practitioners know and understand your industry, your business language and your technology language.

Deloitte uses myInsight: Global Incentives (“myGi”) which is a web-based technology tool designed and maintained by Deloitte that allows the collection of data, documentation and technical eligibility assessments in an efficient and scalable way. This technology streamlines and accelerates the gathering and processing of data and information needed to make informed business decisions regarding credits and incentives claims. Find out more about our Gi3 Technology Solution R&D claims and Government Incentive applications often receive regulatory scrutiny. Deloitte can assist in the resolution of any such audits as well as providing support relating to information requests or reviews from government bodies.