Company Eligibility

  • Be a tax resident in New Zealand
  • Have a net loss in the corresponding tax year
  • Have eligible R&D expenditure for the income year
  • Have sufficient R&D wage intensity
  • Meet the corporate eligibility criteria
  • Own (solely or jointly) the intellectual property and know-how that results from the R&D activity.

If you are part of a group of companies you may still be eligible as long as the company meets the criteria above and the group as a whole:

  • Is in a tax loss postilion, and
  • the R&D wage intensity calculation is based on the entire group’s total R&D labour expenditure, divided by the total labour expenditure for the entire group.

A company will not be eligible if it is:

  • Treated as a resident of a foreign country or territory under a double tax agreement
  • A look through company
  • Listed on a recognised exchange (eg: stock exchange)
  • 50% or more of the company’s shares are owned by any one, or a combination of
    • public authority
    • local authority
    • crown research institute
    • state enterprise
  • Established by or subject to:
    • the Education Act 1989
    • the New Zealand Public Health and Disability Act 2000
    • the crown Entities Act 2004.

R&D Wage Intensity

To be eligible you must spend 20% or more of the total labour expenditure on R&D, this is defined as a total of:

  • Salary or wages paid to employees
  • Amounts paid to shareholder-employees as income
  • The costs of research and development carried out by a contractor excluding GST.