What is the research and development loss tax credit?​

The research and development (R&D) loss tax credit allows business losses from eligible expenditure associated with R&D to be cashed out instead of being carried forward. Generally, tax losses are carried forward to the next income year.

Losses that are cashed out are no longer available to apply against income in future years.

For income years beginning on or after 1 April 2015, you may be able to "cash out" (have refunded) up to 28% of any tax losses associated with eligible R&D activity if your company is resident in New Zealand.

Read more information about the R&D loss tax credits in our pages 19 to 29.

You can repay the R&D loss tax credit by paying:

- future income tax (ie,by trading into profit), and/or

- R&D repayment tax following a loss recovery event (LRE). 

New imputation credits for income tax paid by a company won't be available to a company that has cashed out R&D losses until that company has repaid the cashed out amounts.

To read full original article, please select here: www.ird.govt.nz

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