The new government has committed to the re-introduction of a 12.5% research and development (R&D) tax credit.
The possible effective date for the R&D tax credit could be 1 April 2019.
It is anticipated that with the re-introduction of the R&D tax credit, the current “Callaghan Innovation R&D Growth Grant” could be “wound down.” However, from a delivery standpoint, tax professionals have expressed a belief that the Callaghan Innovation is well placed to undertake technical reviews of R&D tax credit claims, rather than having the Inland Revenue recruit scientists, engineers, and technical specialists as happened in 2008-2009. Tax professionals also believe the new R&D tax regime would need to have broad political support to avoid another wholesale overhaul if there is a future change of government.
Given it could be another year before any new legislation would take effect, and provided the current R&D funding continues to be available, businesses need to reconsider their eligibility for assistance and internal processes for documenting R&D activities.
Read a March 2018 report [PDF 138 KB] prepared by the KPMG member firm in New Zealand
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