New Zealand Government Incentives

In Tax

Across the OECD, governments use incentive programs to foster innovation and change corporate behaviour. This includes tax incentives, loans, equity investment, business concessions and direct grant funding. Our team of incentives professionals combine experience in science, engineering and business fields with specialist grant and incentive program knowledge to help you maximise incentives in the jurisdictions you operate.

Related topics Tax Tax function operations

What EY can do for you

Incentive funding must align with your strategy. We will work with you to understand your strategy, projects and operations and recommend which government incentive programs are right for you now, and into the future. Don’t miss another incentive opportunity. We can assist you at all stages of the incentive process; from strategic incentive planning, project alignment and scoping, and preparing applications, through to ongoing compliance and verification.

  • R&D Tax Incentive

    The New Zealand Government’s flagship research and development (R&D) incentive provides a 15% tax credit for expenditure on eligible R&D activities. Tax credits can be used to offset income tax payable, with unused amounts being refunded. Refund caps apply.

    Qualifying R&D includes core R&D activities and supporting R&D activities. Core R&D activity must:

    • Be conducted using a systematic approach; and
    • Have a purpose of creating new knowledge or new or improved goods, services or processes; and
    • Have the intent to resolve scientific or technological uncertainty; and
    • Occur in New Zealand.

    Other activities that are integral to and have the main purpose of supporting the core R&D activity may also qualify as supporting R&D.

    Robust R&D technical documentation and expenditure tracking systems allows businesses to prepare a robust and fulsome R&D claim. EY’s specialist team can assist by facilitating workshops, advising on the design and implementation of systems for tracking and recording projects and expenses, or guiding you through the stages of the application process. EY also has a proprietary digital tool, EY Ready(link) which can assist with compliance and real-time record keeping.

  • R&D Loss Tax Credit

    The R&D loss tax credit allows certain R&D-intensive companies to cash-out tax losses arising from R&D, rather than carrying them forward to offset future profits. This incentive helps company cashflow when it’s needed the most.

    To qualify for this credit, a New Zealand company must:

    • Be undertaking R&D in New Zealand; and
    • Own the IP arising from the R&D; and
    • Incur at least 20% of global labour expenses on R&D in New Zealand; and
    • Deduct R&D expenditure in the tax year; and
    • Have a tax loss in the tax year; and
    • Meet certain corporate eligibility requirements.

    Same companies can claim both the R&D loss tax credit and the R&D tax incentive, leading to a combined cash benefit of up to 43% of R&D expenditure. Other companies can claim the R&D loss tax credit and other government grants. A third group of companies can claim the R&D loss tax credit, the R&D tax incentive and other government grants. However, care must be taken as each program has a different definition and requirements. Talk to EY to identify which R&D activities can be claimed under each program.

  • R&D Incentive Process & Documentation

    Creating and retaining documentation to substantiate any tax or grant claim is critical. However, accurately tracking the work carried out and setting up processes for record keeping can add an additional compliance burden, potentially distracting staff from their core roles.

    The specialist EY team can help you find the right balance between utilising existing or creating new processes and documentation. Collecting the right information at the right time can deliver a robust and well substantiated claim, with minimal additional impact or compliance. 

    EY also has a proprietary digital tool, EY Ready(link) which can assist with R&D incentive compliance and real-time record keeping, including flexible time tracking.

  • Government Grants

    The EY Grants team offers knowledge and professional advisory services to businesses and community groups seeking meaningful government contributions for their innovation, commercialisation, capability, and capital investment in New Zealand.

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