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Business Tax Cuts And R&D Support Come Into Play

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Fuseworks Media
Fuseworks Media

Wellington, March 31 NZPA - A promised drop in the company tax rate and a new 15 percent tax credit on research and development for businesses take effect from tomorrow (April 1).

The tax rate drops to 30 percent from 33 percent, the first company tax cut in New Zealand since 1988.

"We expect that lowering of the company tax rate will serve to strengthen the competitiveness of New Zealand-based companies, and that is good for the long-term interests of all New Zealanders," Revenue Minister Peter Dunne said.

Also in force from today is a tax credit which will give eligible businesses back 15 cents in every dollar they spend on research and development (R).Key tests for the credit relate to the business itself, the activity and the amount spent on RThe business must operate in New Zealand, and R activities must be related to business activities.The business must also control the R, bear the financial risk, and own the results. It generally must also spend $20,000 or more.Businesses that spend less than $20,000 will still be able to claim the tax credit if they use a research provider listed on the Inland Revenue website.Listed research providers must be able to undertake R for other, non-associated businesses, have facilities in New Zealand, charge commercial rates and keep good supporting records.NZPA WGT cch

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