R&D Tax Incentive (RDTI)

R&D Tax Incentive (RDTI) is sponsored by Callaghan Innovation (administered by MBIE Innovation Services), New Zealand Government. A financial measure designed to support New Zealand businesses engaging in research and development (R&D) activities by offering a 15% tax credit.

How do I apply? | Research and Development Tax Incentive (RDTI) NZ Choose the application that’s right for you There are two ways you can apply for the RDTI: Apply using a ‘General Approval’ (GA) application. This is how most businesses access the RDTI, and involves showing how a specific R&D project you’re doing meets the RDTI eligibility criteria.

If you’re doing more than one R&D project, you can submit multiple GA applications. Apply to be a ‘Significant Performer’, by submitting a ‘Criteria and Methodologies’ (CAM) application. This option is available to businesses that intend to spend more than $2 million on eligible R&D in one income year.

It lets you self-assess which activities you’re doing are eligible for the RDTI. Scroll down for more details about each type of application. We recommend you talk to us first If you’re interested in applying for the RDTI, we strongly recommend that you talk to our Customer Engagement Specialists first.

We can discuss what type of application is right for you, and support you to prepare your application, including providing feedback on your drafts. You will need to provide some details about your business to confirm that it’s eligible for the RDTI. Log on to your myIR account, go to “I want to” and select “RDTI enrolment”.

If Inland Revenue confirms that your business entity is eligible, you will be given access to the General Approval and CAM application forms in your myIR account. How to make a General Approval application We recommend you use the General Approval (GA) application template below to draft your application/s. The template includes guidance you can read, to help you see what information you need to provide.

You can also read the General Approval application examples below. These show you what a completed application could look like. Customer Engagement Specialists can review draft applications before they are submitted on myIR.

We highly recommend that you take advantage of this free service. Once your application/s is finalised, you then cut and paste the copy from each section into the matching field on the GA application form in myIR. What information do I need to provide in my GA application?

The main aim of the GA application is to capture information that shows whether your R&D meets the five eligible activity 'tests' . You are also asked to list the core R&D and any supporting activities you wish to claim for, and provide: an estimate of your eligible R&D expenditure some basic details about your business. Find out more about the information you will be asked to provide .

How is my GA application assessed? Your application will be assessed by a specialised assessor based at the Ministry of Business, Innovation and Employment (MBIE). Find out more about the assessment process .

Tips for writing a good GA application Writing a good quality application is easy if you remember that the application’s main focus is to capture technical information about your eligible R&D activity. You don’t need to provide a comprehensive business case. Find out more about how to prepare a good quality application .

What’s the application deadline? The application deadline depends on the balance date of your particular income year. For details, check the Application and claim deadlines .

How to apply as a Significant Performer As a Significant Performer, you don’t need to fill out separate applications for each R&D project; however, the application process can be more involved. If you have a large number of R&D projects, it could save time and effort in the long run. We recommend you read the guidance documents referenced below, which explain more about the application process and how your application is assessed.

Some businesses like to start out by making a GA application. Then, once they’re more familiar with the RDTI, they switch to being a Significant Performer. As a Significant Performer, you retain the ability to make a GA application for any project that falls outside the scope of your CAM agreement.

What information do I need to provide? The main focus of the CAM application is determining that your legislative understanding and business processes are sufficient for you to become an RDTI Significant Performer.

The main things you need to be able to demonstrate are: good understanding of RDTI legislation, so you can accurately identify eligible activities good business processes that enable you to accurately record eligible R&D activities and expenditure. The application process requires that you provide a workbook or framework that contains the criteria and methodologies of your CAM processes.

Guidance to help you apply We have developed a guide that explains the main types of information we will need from you as part of a CAM application. There’s a high level of flexibility when it comes to showing us how you meet the CAM criteria. You should also read the evaluation tool that assessors use when assessing a CAM application.

This may help you ensure your application addresses all the key eligibility criteria. You can use our guide and evaluation tool to put together a tailored application document, or alternatively, you may wish to provide us with access to existing, relevant business records and documents. What’s the application deadline?

The application deadline depends on the balance date of your particular income year. For details, check the Application and claim deadlines . Confidentiality and security Many businesses doing R&D are naturally concerned about protecting their intellectual property.

Please be assured that when applying for the RDTI, you will not necessarily need to provide sensitive details about your actual solutions to the scientific or technical challenges you’re aiming to overcome. This is because the RDTI’s focus is on the nature of the scientific or technological challenge you’re facing, and the investigative process you’re taking to resolve it.

We use highly secure systems to ensure the safety of all information you provide as part of your application. Any information you submit for the RDTI is treated confidentially. What period can my application cover?

Both a GA and CAM application can be approved for up to 3 income years, including the income year in which you apply. You can claim expenditure on any approved supporting activities that occur within the relevant income year. You can also claim eligible supporting activity expenditure outside of the related core R&D activity income year.

See claiming supporting activities outside the year the core R&D activity is performed . If my application is approved, what happens next?

If your application is approved - this will be following assessment of your R&D project (for a GA application) or your capability to self-assess eligible R&D (for a CAM application) - you will then need to: keep records of your eligible R&D activities and expenditure enter the amount of tax credit you are claiming in your income tax return submit a Supplementary Return to claim your tax credit after the end of your tax year.

amend your GA application if there is a material change to the scope or timing of your R&D. All about supporting activities . To find out more, go to How do I claim?

How do I vary an existing General Approval? Can I extend my General Approval period? If you have a 1 or 2 year approval and wish to extend the approval period of your project because your R&D activities were not completed, you can apply for a variation to extend your approval period.

The due date to request a variation is the last day of the 3rd month after your latest approval year. If this date to request a variation has passed, you will need to submit a new GA application. You can amend your GA (once approved) in myIR, ensuring you explain the reason for the change.

You can also make changes by emailing Inland Revenue at r&dtiteam@ird. govt. nz The maximum approval period that can be applied for is 3 years for each GA application.

A new GA application must be filed for GA periods over 3 years. What happens if there is a material change to the scope of my R&D? If you applied for the RDTI with a GA application, you are asked to provide a description of the scientific or technological uncertainty that you are attempting to resolve, and the systematic approach that you intend to follow.

If these change, you can amend your GA (once approved) in myIR, ensuring you explain the reason for the change. You can also apply for a variation by emailing Inland Revenue at r&dtiteam@ird. govt.

nz . These changes can be made up until the deadline that applies for GA applications for the relevant year, so that any changes can be reflected in your Supplementary Return. Refer to Application and Claim deadlines .