This track is for finance managers, tax leads and accountants preparing a New Zealand Research and Development Tax Incentive (RDTI) claim in-house. The RDTI gives a 15% tax credit for eligible R&D expenditure and is administered by Inland Revenue. Three things change the program's shape: approval comes before the claim; the claim itself is a supplementary return filed after the income tax return; and a loss-making company's refund is limited by the labour-related taxes it paid in the year.
How the New Zealand rules change the program
| Module | What is different in New Zealand | Country page |
|---|---|---|
| Scheme mechanics | A tax credit of 15% of eligible R&D expenditure, with a minimum of NZ$50,000 a year unless you use an approved research provider and a maximum of NZ$120 million a year. | New Zealand overview |
| Cost capture | Schedule 21B lists what is eligible: employee remuneration, contractors, approved research providers, consumables, depreciation loss to the extent of R&D use, and overheads apportioned on a reasonable basis. | Eligible expenditure |
| Staff time apportionment | Remuneration is eligible to the extent the employee performs R&D activities. Inland Revenue expects employee costs to be apportioned using timesheets or another reasonable and consistent method supported by records. | Documentation |
| Contractors and overseas costs | Expenditure on a contractor performing R&D on behalf of the claimant is eligible for the claimant. R&D performed outside New Zealand is limited to 10 percent of the total eligible expenditure for the year and must be integral to a core activity performed in New Zealand. | Eligible expenditure |
| Grants and subsidised expenditure | Eligibility turns on who controls the R&D, bears the financial risk and effectively owns the results; expenditure on R&D performed for another person is ineligible. Check Inland Revenue's guidance on how government funding affects eligible expenditure before claiming for a funded project. | Eligibility |
| Calculations | 15% of eligible expenditure, applied against the income tax liability for the year. The refundable amount is the credit remaining after offset, limited to the refundability cap: the total of the person's PAYE, employer superannuation contribution tax and fringe benefit tax for the year. | Refundability |
| Working with technical teams | The general approval application asks for each core activity: the scientific or technological uncertainty, the new knowledge sought, the systematic approach and the start and end dates; and for each supporting activity, the related core activity and how it is required for and integral to it. | General approval |
| Filing and deadlines | Apply for general approval by the last day of the 3rd month after the end of the income year. File the income tax return first, then the supplementary return within 30 days after the income tax return due date. | Supplementary return |
| Reviews and audits | Inland Revenue selects claims for review on a risk basis and may engage external technical experts. | Inland Revenue reviews |
Forms and deadlines
| Form or step | Timing | Country page |
|---|---|---|
| General approval application, in myIR | By the last day of the 3rd month after the end of the income year. Approval may cover the income year of the application and up to 2 following income years for activities that continue. | General approval |
| Criteria and methodologies approval application | Due on the last day of the 6th month before the end of the first income year it relates to, where eligible R&D expenditure for the year is expected to exceed NZ$2 million. | Criteria and methodologies approval |
| Income tax return | For a 31 March balance date, due 7 July, or 31 March of the following year for taxpayers with a tax agent and an extension of time. | Deadlines |
| R&D supplementary return, in myIR | Within 30 days after the income tax return due date, or the extension of time due date. It reports eligible expenditure for each approved activity by expenditure category. | Supplementary return |
| Amendment and records | The Commissioner may amend an assessment within 4 years of the end of the tax year in which the return was provided. Business records must be retained for 7 years. | Inland Revenue reviews |
Key rules to know
Approval first, and on time. Inland Revenue does not accept late general approval applications, and a credit is not available for expenditure on activities that were not approved for the year. 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.
The refund cap is a payroll number. The refundability cap is the total of the person's PAYE, employer superannuation contribution tax and fringe benefit tax for the year, with adjustments for wholly owned groups.
Who claims follows risk and ownership. 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.
Worked example
Illustrative example. Waikato Materials Limited, a hypothetical company with a 31 March 2026 balance date and a tax agent with an extension of time, applies in myIR by 30 June 2026 for general approval of one core and two supporting activities.
| Cost | Amount | Treatment | Eligible |
|---|---|---|---|
| Engineers' remuneration and employer superannuation, 60% of time on approved activities per timesheets | NZ$800,000 | Employee remuneration, apportioned | NZ$480,000 |
| New Zealand contractor performing part of the core activity | NZ$100,000 | Contractor; the contractor cannot claim | NZ$100,000 |
| Approved research provider (university) for materials testing | NZ$50,000 | Approved research provider | NZ$50,000 |
| Materials consumed in trials, none sold | NZ$40,000 | Consumables | NZ$40,000 |
| Depreciation loss on test equipment used 100% for R&D | NZ$30,000 | Depreciation, to the extent of R&D use | NZ$30,000 |
| Rent and power, apportioned by laboratory floor area at 20% | NZ$200,000 | Overheads, reasonable apportionment | NZ$40,000 |
| Australian contractor for a simulation study integral to the core activity | NZ$60,000 | Overseas R&D, within 10 percent of total eligible expenditure | NZ$60,000 |
| Total eligible expenditure | NZ$800,000 |
The New Zealand items total NZ$740,000. Adding the overseas study gives NZ$800,000, and 10 percent of that is NZ$80,000, so the NZ$60,000 fits within the overseas limit. The credit is 15% of NZ$800,000, which is NZ$120,000.
Waikato's income tax for the year is NZ$30,000, so the credit is applied against it first and NZ$90,000 remains. Its PAYE, employer superannuation contribution tax and fringe benefit tax for the year total NZ$250,000, so the cap is not reached and NZ$90,000 is refunded after the supplementary return is processed. Had those labour-related taxes totalled only NZ$60,000, the refund would have been NZ$60,000 and NZ$30,000 would have carried forward, subject to shareholder continuity. The IR4 return goes in by 31 March 2027 and the supplementary return by 30 April 2027.
Related country guide pages
Self-check questions
Answer each question, then open it to compare.
A company with a 31 March 2026 balance date and a tax agent with an extension of time wants to claim the RDTI for that year. What are its three deadlines?
Eligible expenditure is NZ$800,000, income tax for the year is NZ$30,000 and the year's PAYE, employer superannuation contribution tax and fringe benefit tax total NZ$60,000. What is refunded?
An Australian contractor performs a simulation study that is integral to a core activity performed in New Zealand. How much of the cost can be eligible?
The engineering team started a new core activity in the second half of the year that was not in the approved application. Can its costs be claimed?
Which route is available to a business expecting more than NZ$2 million of eligible expenditure, and what is approved under it?
What does Inland Revenue expect the records to show once an approval has been granted?
Official sources
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Educational content only, not tax advice. See the disclaimer.