nz-r-d

R&D Tax Incentive (RDTI) - Deadline Approaching

Fri, 06 Jun 2025 03:22:01 GMT

The Deadline is Approaching for FY25 General Approval Applications

If your business is undertaking research and development activities and has a 31 March 2025 balance date, then 30 June 2025 is the final deadline to submit your General Approval (GA) application for the Research and Development Tax Incentive (RDTI). This deadline is now just around the corner.

What Is the R&D Tax Incentive?

The RDTI is a government initiative that offers a 15% tax credit on eligible R&D expenditure. Its purpose is to support innovation by helping New Zealand businesses offset the cost of developing new or improved products, processes, or technologies.

The regime applies to a wide range of industries — including software development, engineering, manufacturing, agritech, life sciences, and more — provided the activities meet the legislative definition of eligible R&D.

Key features include:

15% tax credit on eligible R&D expenditure
Refundable credit for businesses in loss (subject to caps and criteria)
Applies to R&D conducted in New Zealand

Why You Need a General Approval

To claim the RDTI, you must have a General Approval (GA) in place. This application outlines your core and supporting R&D activities and is reviewed by Callaghan Innovation and Inland Revenue.

Having this in place before or during the income year gives your business certainty — you can proceed with your investment in innovation knowing the activities will qualify for the tax credit.

If you haven’t yet submitted a GA application for the 2025 income year, you still have time — but the 30 June 2025 deadline is final for businesses with a 31 March balance date. If approved, the General Approval can apply for up to three years, allowing you to streamline future claims.

GA application deadline for 31 March 2025 year-end: 30 June 2025

Note: If you have a non-standard balance date, your GA deadline may differ. Please contact us to confirm your specific due date.

Our Advice

If you’ve invested in innovation, product development, software, or scientific experimentation in FY25 — or if you’re planning to — now is the time to ensure you’re eligible to claim under the RDTI.

We are a specialist R&D tax team with deep expertise in New Zealand’s RDTI regime. We’ve helped businesses across a wide range of industries — from engineering to biotech to SaaS — secure substantial R&D funding, often in the hundreds of thousands of dollars.

Our clients choose us for our:

Technical depth and understanding of IRD’s eligibility criteria
Ethical, fixed-fee pricing model — no % of your claim
Flexible, low-touch process — so you can stay focused on growing your business

Whether you need end-to-end support or just help with the General Approval, we can tailor our involvement to suit your needs. We’ll handle the complexity, engage with your team as required, and ensure your application is accurate, compliant, and optimised for success.

If you think your business may qualify for the RDTI but haven’t yet submitted your General Approval — contact us today. We’ll help you assess eligibility, prepare your application, and unlock the full benefit of the incentive.

Disclaimer:
The information provided in this article is general in nature and does not constitute personalised tax advice. You should consult with a qualified tax adviser familiar with both US and NZ tax systems before making any decisions based on this content.

R&D Tax Loss Cash-Out Deadline Approaching

Mon, 14 Apr 2025 00:05:55 GMT

If your business is carrying out research and development (R&D) work, you may be eligible to receive a cash payment from Inland Revenue— however there is limited time to act if you want to claim this for FY24.

The deadline to apply for the R&D Tax Loss Cash-Out for the 2024 income year is 30 April 2025 (assuming you have a March balance date and an Extension of Time). If you miss this date, you lose the opportunity to turn your tax losses into cash—even if you fully qualify.

We’ve had clients successfully claim up to $500,000 in cash refunds under this regime—don’t miss the opportunity to access funding that could support your next stage of innovation.

What is the R&D Tax Loss Cash-Out?

The R&D Tax Loss Cash-Out allows qualifying companies to receive a cash refund of up to 28% of their eligible R&D-related tax losses instead of carrying those losses forward. It's designed to support innovative New Zealand businesses who are investing heavily in new ideas but are not yet making a profit.

This incentive has already helped many of our clients unlock early-stage cash flow, including:

An engineering firm developing a new kind of feed wagon with enhanced efficiency and modular design.
A technology company applying nanobubble technology in a novel, previously untested way to enhance system performance and efficiency.
A dairy equipment manufacturer creating a new mastitis spray system to reduce labour and increase effectiveness.
A biotech start-up researching new cancer drug candidates.
A company designing cutting-edge scientific research equipment.

If your business is involved in resolving scientific or technological uncertainty—for example, testing whether something will work in practice, or building a prototype you can't yet confidently replicate—there’s a good chance you're conducting eligible R&D.

Key R&D Criteria (Do You Qualify?)

To qualify, the R&D activity must:

Be aimed at creating or improving products, processes, or services.
Involve uncertainty—you must not already know how to achieve the result using existing knowledge.
Be conducted by a New Zealand tax-resident company that is loss-making.

Eligible expenses may include R&D labour, materials used in trials, prototype costs, testing, and certain overheads.

Don’t Miss Out – Here’s What Needs to Happen

To claim the R&D Tax Loss Cash-Out for the year ending 31 March 2024 the R&D tax loss cash-out application must be submitted by 30 April 2025.

If you miss this deadline, you forfeit the right to claim—even if you fully meet the criteria.

How We Can Help

We’ve helped a wide range of clients—from tech start-ups to farmers and engineers—successfully claim the R&D tax loss cash-out. When it comes to R&D claims, experience matters, we’ve seen first-hand the costly mistakes made by less experienced or overly aggressive advisers. We are genuine R&D tax specialists, and we take the time to get it right, ensuring your claim is both compliant and optimised.

We can assist you with:

Confirming whether your activity qualifies as eligible R&D.
Reviewing and categorising your R&D expenditure correctly.
Completing and lodging your income tax return and application on time.
Ensuring your documentation and labour records meet IRD requirements.
Planning for future claims under both the R&D Tax Loss Cash Out and the R&D Tax Incentive regimes.

Final Reminder: Applications must be submitted by 30 April 2025

We recommend getting in touch with us before the deadline, so we have time to assess your eligibility, prepare your records, and lodge your claim with Inland Revenue.

If you think your business is doing innovative or technical work—even if you’re not sure it qualifies— contact us today. We’d love to help you make the most of this opportunity.

How would you use R&D Tax Credits to develop your product further?

Wed, 10 Nov 2021 22:47:00 GMT

A successful start-up company will typically have a five-stage journey:

Along the way, there will be many challenges and problems to resolve, including accessing grants and managing cash flow, undertaking capital raises, and a potential final stage – an exit.

You need the right expertise in your camp, fighting your fight and looking out for what you don’t know you need to look out for. A team that works together to get your business to the end goal.

HOW CAN WE HELP WITH YOUR R&D JOURNEY?

Accessing R&D Tax Credits

With an R&D tax specialist, you can put your confidence in an experienced professional who has developed knowledge of the complexities of this notoriously difficult area. Technical knowledge concerning R&D tax goes a long way to ensure your claims are successful, so by working with us, you can approach making a claim with greater confidence.

There are two options for R&D tax credits, both outlined below. We are happy to meet with you, discuss these options and work out the best path for you and your business.

R&D Tax Incentive

Summary

The Detailed Process

Step One – Confirm Eligibility

The first step is to confirm whether your organisation qualifies for the RDTI. The core concept here is whether you are a taxpayer in New Zealand and whether you either own the results of the R&D or can use the results without payment.

Your R&D activities must also meet the defined criteria. We will work closely with you to review your R&D activities and advise whether they are likely to qualify for the RDTI. The RDTI regime has its own definition of R&D, which goes beyond whether something is “new”.

Your R&D activity must:

We also consider your R&D expenditure, as there are specific rules around what expenditure will or won’t qualify for the RDTI.

Step Two – Application for General Approval

We then lodge an Application for General Approval. To do this we need to break down your R&D activities into core and supporting activities and calculate the relative costs. The Application for General Approval is due 7 May (for a 31 March balance date). For example, the Application for General Approval for the year ending 31 March 2022 is due on 7 May 2022.

Once the IRD grants its approval, it gives you certainty around whether you will be able to claim this 15% tax credit for your R&D expenses. This Application can be valid for up to three years, so think of it as providing an ongoing benefit for your business.

We recommend we complete the Application for General Approval as soon as possible so you can spend with confidence.

Step Three – Supplementary Return

Each year, we need to submit the Supplementary Return. This is essentially the tax return that calculates the RDTI each year, based on actual costs and revenue. We go beyond what a computer algorithm can do here, as we will hunt through your P&L, and work with you to identify as much eligible R&D expenditure as we can.

We also calculate what portion of the RDTI is refundable. The Supplementary Return is due on 30 April of the following year (for a 31 March balance date). For example, the Supplementary Return for the year ending 31 March 2022, is due on 30 April 2023.

R&D Tax Loss Cash Out

The R&D Tax Loss Cash Out process has been around for a few years.As a result, it is reasonably streamlined and more straightforward in terms of IRD processing. However, it is still essential to paint the best picture possible in your application, which is where we come into it. We are experts in dealing with the IRD on these applications. We know the rules. And we also go further – we hunt through your P&L and work with you to identify as much qualifying R&D expenditure as possible.

The R&D Tax Loss Cash Out is essentially an interest-free loan from the government. It allows you to ‘cash’ out your tax losses now, rather than wait to make a future profit to be able to utilise their benefit. The loan is paid back out of your future tax payments. However, there are several scenarios that can also trigger a repayment liability, such as the sale of the IP. We also work with clients looking at an exit to advise on the tax implications of a sale of the IP, and the best timing in terms of triggering an R&D Tax Loss Cash Out Repayment Event. Depending on your future circumstances, the loan may or may not be required to be repaid.

In the meantime, if you qualify for the R&D Tax Loss Cash Out, we strongly recommend going down this path as you can get up to 28% of your R&D expenditure back in cash. We love working with our clients on these applications as we see the positive impact these payments can have in terms of their cash flow and growth, or even just pushing the cap raise out for another year – meaning the R&D development is more complete and the share values have increased.

Compliance – Financial Statements and Income Tax Returns

Understanding the financial complexities of running a successful business is critical to continued growth and sustained performance, so it pays to have access to the very best knowledge and experience. However, when it comes to start-ups and R&D intensive businesses, the difference between a basic understanding and full expertise can be critical to the growth of your business and raising future capital.

There are ongoing questions as to recording details, categorisation of expenses, and the “right” time to recognise the R&D IP on the balance sheet. There are tax losses to protect, and options to defer expenses. These are fundamental questions that need to be answered in the context of your business and your goals.

As such we work with our R&D clients closely, as part of their team. The measure of success is not just whether we can complete financial statements and file your tax returns on time, we strive to ensure we add real value to your team. We love being part of the start-up R&D journey.

GET IN TOUCH

We strive to add value to our clients. We are not just a computer algorithm based overseas, we are local experts that work closely with our clients throughout their start-up journeys

Want to talk about your ideas? Your journey? Get in touch to arrange your complimentary introduction session now.

*This publication contains generic information only. NZ Tax Desk Ltd is not responsible for any loss sustained by anyone relying on the contents of this publication. We recommend you obtain specific taxation advice for your circumstances.