Megan Woods’ signals next steps on the R&D tax incentive

Research, Science and Innovation Minister Megan Woods has released another update on the Research and Development Tax Incentive.

She said feedback on how to make the R&D Tax Incentive work better had been “incredibly valuable” and she is confident of introducing a scheme that will help more New Zealand firms increase their R&D.

What we did

We made a number of changes after listening to your feedback, such as lifting the credit rate to 15 percent, and lowering the minimum expenditure threshold to $50,000. We also amended the definition of R&D so that eligibility could be accessed more easily across all sectors.

All the policy details, including submissions and official papers, are available on MBIE’s website.

On the Growth Grant front, we have extended contracts until 31 March 2021. If you are a current Growth Grant holder, Callaghan Innovation will continue to support your transition to the tax incentive over this time.

Next steps

Legislation to enact the R&D Tax Incentive is now going through Parliament.

I encourage you to get involved in the select committee process so we can really hone in on the technical details. You can read the Bill in its current form and make a submission to the Finance and Expenditure Committee on Parliament’s website. You can also read a commentary of the Bill, which clarifies some of the more technical aspects of the Tax Incentive, on Inland Revenue’s website.

We are also beginning ‘phase two’ of the consultation process, where we’ll address issues such as refundability, and refine, extend and simplify the reach and usability of the Tax Incentive.

We want to ensure we engage widely with the right people, so if you would like to be involved I encourage you to make contact with the teams at MBIE and Inland Revenue.

Summing up

It’s important to remember that the R&D tax incentive will be one form of support amongst many for supporting business innovation.

Dr Woods said one of her priorities as Minister for Research, Science and Innovation is to have a full package of support for New Zealand’s Innovation system, including more support for start-ups in the near future.

Source:  Minister of Research, Science and Innovation

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