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Following the Government’s announcement of improvements to its Research and Development (R&D) Tax Incentive to ensure financial support reaches more businesses we are seeking our members views.
A Tax Incentive in the form of a tax credit benefits businesses in profit, but without refundability it is of limited use for pre-profit businesses or businesses in loss.
Under the Government’s 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 under the measures for limited refundability.
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.
The Bill is currently before the Finance and Expenditure Committee and the full text can be read here. The relevant sections of the Bill are s105 – 107 which make it easier for pre-profit schemes to access credits.
If you would like to contribute to our submission, please email for further information.