How does the RDTI work?

We want businesses in New Zealand to have more money available to invest in R&D.

The RDTI offers a 15% tax credit on eligible R&D expenditure. You can use this to reduce the amount of income tax you pay. In some circumstances, you can receive a cash refund in place of a tax credit.

Countries with higher rates of R&D tend to have more diverse and more highly productive economies. So increasing R&D is an important step towards boosting both your business, and the diversity and productivity of the New Zealand economy.

The tax credit is issued after you’ve filed your income tax return and other steps are completed. However, earlier access is possible - e.g. by using your anticipated credit to offset your provisional tax payments.

Find out more about the thinking behind the RDTI. 

Tax credit

• tax credit equal to 15% of eligible R&D expenditure
• you can use your anticipated RDTI tax credit to offset provisional tax payments
• if your business is in a tax loss position or your credit exceeds your tax to pay, you may be eligible to have all or some of your credit refunded in cash (up to a cap based on labour-related taxes) and/or carried forward to the next income year

Find out more about how and when you receive your tax credit 

Flexible

• apply in advance or while your R&D project is under way - you can claim any eligible expenditure from the start of the income year in which you apply
• your application can be approved for up to 3 income years, including the income year in which you apply
• you can submit a new application for projects ongoing after 3 years
• no limit to how many applications you can make - the more eligible R&D projects you undertake, the more credits you can claim (up to the maximum claimable expenditure of $120 million per year, unless prior approval is given to exceed this cap for R&D that will return “substantial net benefit for New Zealand”)

Technical focus - no commercial or outcomes criteria to meet

• no evidence of commercial feasibility needed to apply
• tax credits are payable regardless of whether or not your R&D successfully achieves its intended outcomes

Inclusive

• most types of business can apply, regardless of legal structure
• businesses from any sector can apply
• tax credits available even to small businesses, provided you spend at least $50k per year on eligible R&D, or you use an approved research provider to do your R&D for you

The RDTI is delivered jointly by Callaghan Innovation and Inland Revenue:

• Callaghan Innovation provides information and support, and assesses the eligibility of your R&D
• Inland Revenue makes decisions on applications and manages tax credit claims.

MBIE oversees RDTI policy.

There are four steps to access a tax credit:

Find out how to register and apply.

Find out how to keep records and make a claim.