Menu
New government incentives for R&D win business support

New government incentives for R&D win business support

Access to R&D incentives improved for pre-profit firms

Graeme Muller (TechNZ)

Graeme Muller (TechNZ)

TechNZ and Business NZ are supporting the government's reshaped R&D incentive schemes.

BusinessNZ chief executive Kirk Hope said a new incentive for R&D by companies that have yet to make a profit, along with Callaghan Project Grants and the current R&D tax credit, would provide innovation incentives to a broader range of businesses. 

The rebate, up to the level of payroll tax paid in the same year, will be available for new and loss-making firms, the government announced yesterday.

"In the past, small start-ups and businesses engaging in the risky process of developing something new were not eligible for R&D tax relief if they were not making a profit," Hope said.

"This new incentive will help foster innovation among currently loss-making businesses and create a fairer scheme for greater innovation in the New Zealand economy generally."

The Taxation (KiwiSaver, Student Loans, and Remedial Matters) Bill, introduced to Parliament in late June, means more businesses claiming the R&D tax incentive will be eligible for refunds of their R&D tax credits from the 2020/2021 tax year onwards.

Under the plan, refundable tax credits would generally be available up to the amount of payroll tax paid by the business in the same year. 

At the moment a pre-profit firm in year one of the scheme would only be able to receive a maximum pay-out of $255,000.

New Zealand tech organisations, through NZTech, are also happy to see the government continuing to improve its R&D scheme.

Chief executive Graeme Muller said the organisation had been supportive of the tax credit scheme but concerned that there were still complex issues such as pre-profit access that needed to be addressed.

“The government promised to continue to evolve the scheme so the announcement of details that provide some pre-profit firms with access is a great step in the right direction," Muller said.

It was clear that the intent is positively focused on ensuring our fastest growing hi-tech and software sectors can access the tax credits system to help encourage them to invest further in R&D, he said.

“There are still a few complex issues that need further discussion such as the definition of software development and we are pleased the Minister is keen to continue working with the sector to maximise the impact of the tax credit system for New Zealand’s prosperous growth."

Statistics NZ data shows computer services and scientific and tech services make up 35 percent of all R&D investment. Computer services companies alone invested $586 million in R&D in 2018, an increase of $150 million.

The tech sector is made up of more than 20,000 firms, most of them small businesses, yet they contribute around $16 billion to GDP and close to $7 billion in exports, making them the country’s third largest export sector.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags R&Dresearch and developmenttax incentives

Brand Post

How to become the best IT MSP

This article provides guidance for managed service providers (MSPs) that want to grow their business. It is also useful for any IT service provider looking to move from the break-fix model to managed IT services.

Featured

Slideshows

Reseller News Innovation Awards 2019: meet the winners

Reseller News Innovation Awards 2019: meet the winners

Reseller News honoured the standout players of the New Zealand channel in front of more than 480 technology leaders in Auckland on 23 October, recognising the achievements of top partners, emerging entrants and innovative start-ups.

Reseller News Innovation Awards 2019: meet the winners
Malwarebytes shoots the breeze with channel, prospects

Malwarebytes shoots the breeze with channel, prospects

A Kumeu, Auckland, winery was the venue for a Malwarebytes event for partner and prospect MSPs - with some straight shooting on the side. The half-day getaway, which featured an archery competition, lunch and wine-tasting aimed at bringing Malwarebytes' local New Zealand and top and prospective MSP partners together to celebrate recent local successes, and discuss the current state of malware in New Zealand. This was also a unique opportunity for local MSPs to learn about how they can get the most out of Malwarebytes' MSP program and offering, as more Kiwi businesses are targeted by malware.

Malwarebytes shoots the breeze with channel, prospects
Show Comments