- 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.