This track is for accountants and advisors who prepare or review RDTI claims for New Zealand clients. New Zealand's Research and Development Tax Incentive gives a 15% tax credit for eligible R&D expenditure and is administered by Inland Revenue. The order of events is what changes the practitioner's work: approval comes before the claim, through general approval or criteria and methodologies approval, and the claim itself is a supplementary return filed after the income tax return. Refunds are capped by reference to labour-related taxes.
How the New Zealand rules change the program
| Module | What is different in New Zealand | Country page |
|---|---|---|
| Legislation and guidance | Income Tax Act 2007 subpart LY with schedules 21 and 21B; Tax Administration Act 1994 sections 68CB to 68CF and 33E; Inland Revenue's RDTI guidance and due dates page. | New Zealand guide |
| Eligibility analysis | A core activity is conducted using a systematic approach, has a material purpose of creating new knowledge or new or improved processes, services or goods, has a material purpose of resolving scientific or technological uncertainty, and is not an excluded activity. A supporting activity must be required for and integral to a core activity. | Eligibility |
| Advanced calculations | 15% of eligible expenditure; minimum NZ$50,000 a year unless an approved research provider is used; maximum NZ$120 million; overseas expenditure limited to 10 percent of the total; the refundability cap. | Refundability |
| Technical interviews | The general approval application asks for each core activity the scientific or technological uncertainty, the new knowledge or improved process, service or good sought, the systematic approach and the start and end dates. Inland Revenue may engage external technical experts and has identified descriptions of business objectives rather than R&D as a common reason for declining. | General approval |
| Reports and narratives | Two documents. The approval application carries the activity descriptions. The supplementary return reports eligible expenditure for each approved activity by expenditure category, with adjustments and the refundability calculation. | Supplementary return |
| Disputes and audits | Inland Revenue selects claims for review on a risk basis and may revoke or amend an approval where it was based on incorrect information or the activities performed differ materially. Disputes run through a notice of proposed adjustment and adjudication, then the Taxation Review Authority or the High Court. | Inland Revenue reviews |
| Ethics, integrity and fee arrangements | Shortfall penalties are 20 percent for not taking reasonable care, 100 percent for an abusive tax position and 150 percent for evasion, reduced by a voluntary disclosure made before notification of an audit. Whether contingent fees are permitted depends on the professional body the advisor belongs to; see knowyourfees.org. | Why claim integrity matters |
Forms and deadlines
| Form or step | Deadline or rule | Country page |
|---|---|---|
| General approval application | By the last day of the 3rd month after the end of the income year, in myIR. May be granted for up to 3 income years. Inland Revenue does not accept late general approval applications. | General approval |
| Criteria and methodologies approval | Where eligible expenditure is expected to exceed NZ$2 million: due on the last day of the 6th month before the end of the first income year it relates to. | Criteria and methodologies approval |
| Variation of an approval | Where the approved activities have changed, before filing the supplementary return. | General approval |
| Income tax return | Due 7 July for a 31 March balance date, or 31 March of the following year for taxpayers with a tax agent and an extension of time. | Deadlines |
| R&D supplementary return | Within 30 days after the income tax return due date, or the extension of time due date. The income tax return is filed first. | Supplementary return |
| Amendment | The Commissioner may amend an assessment within 4 years after the end of the tax year in which the return was filed. | Reviews and audits |
| Records | Retained for at least 7 years. | Documentation |
Key rules to know
Approval binds only as described. A general approval binds the Commissioner as to the eligibility of the approved activities to the extent the activities are performed in accordance with the application. Activities that start in a later income year and are not covered by an existing approval must be included in a new or varied general approval application by that year's deadline.
Who may claim. A person is eligible if they carry on a business in New Zealand through a fixed establishment, perform or commission R&D in New Zealand, control the R&D activities, bear the financial risk and effectively own the results, and are not an excluded entity.
What the expenditure must look like. Schedule 21B includes salary or wages and other employee remuneration, including employer superannuation contributions, to the extent the employee performs R&D activities, apportioned using timesheets or another reasonable and consistent method. Overheads are eligible to the extent they relate to R&D and are apportioned on a reasonable basis.
The refund has a ceiling. The refundable amount is the credit remaining after offset against income tax, limited to the refundability cap: the total of the person's PAYE, employer superannuation contribution tax and fringe benefit tax for the year, with adjustments for wholly owned groups. See refundability.
Worked example
Illustrative example. Otago Materials Limited, a hypothetical company with a 31 March 2026 balance date and a tax agent with an extension of time, expects about NZ$800,000 of eligible expenditure. Below the NZ$2 million at which criteria and methodologies approval becomes available, the route is general approval; the practitioner applies in myIR in October 2025, during the year, for one core activity and two supporting activities, and approval is granted for the 2026, 2027 and 2028 income years. The year's figures are below.
| Step | Amount |
|---|---|
| Employee remuneration including employer superannuation, from timesheets | NZ$500,000 |
| New Zealand contractor performing R&D on Otago's behalf | NZ$130,000 |
| Overseas contractor, integral to the core activity | NZ$60,000, within the 10 percent cap of NZ$80,000 |
| Consumables, depreciation and apportioned overheads | NZ$110,000 |
| Eligible expenditure | NZ$800,000, above the NZ$50,000 minimum |
| Credit at 15% | NZ$120,000 |
| Offset against income tax for the year | NZ$30,000, leaving NZ$90,000 |
| Refundability cap: PAYE, ESCT and FBT for the year | NZ$70,000 refunded; NZ$20,000 carried forward |
The practitioner files the income tax return by 31 March 2027 under the extension of time and the supplementary return by 30 April 2027. The carried-forward NZ$20,000 is subject to the shareholder continuity rules that apply to companies. In the 2027 income year the team starts a new core activity, so the practitioner files a varied general approval application before 30 June 2027.
Related country guide pages
Self-check questions
Answer each question, then open it to compare.
A client with a 31 March 2026 balance date first mentions its R&D in August 2026. Can the practitioner still obtain approval for the 2026 income year?
A client expects NZ$3 million of eligible expenditure next year. Which approval routes are open and when is each due?
Eligible expenditure is NZ$1,000,000 including NZ$150,000 on R&D performed outside New Zealand. What is the credit?
The credit exceeds the year's income tax by NZ$200,000. How much is refunded?
During the year the approved core activity was abandoned and the team moved to a different technical problem. What should the practitioner do before the supplementary return?
Official sources
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Educational content only, not tax advice. See the disclaimer.