Contact: Amanda Kennedy
Deloitte
Manager, Media and Communications
+61 (0) 418 806 477

Contact: Serg Duchini
Deloitte
National R&D Tax Leader
+61 (0) 3 9208 7376

A 15 per cent R&D tax credit, announced in the New Zealand Budget today makes NZ more attractive for investment in R&D according to Deloitte National R&D Tax Leader, Serg Duchini.

“All things being equal, it definitely increases the attractiveness of undertaking R&D in New Zealand versus Australia,” Mr Duchini said.

“The credit is comparable to an Australian R&D deduction of 150 per cent for qualifying expenditure.

“The decision to have a volume based credit is sound as it leaves the door open to introduce an additional incremental benefit at a later date, which would further enhance the attractiveness of the regime.

“Unlike Australia, it is not limited to incorporated entities, which means almost any business in NZ can make a claim.

“There are no restrictions on cashing out the benefit unlike the Australian regime which places a cap on turnover at $5million and R&D spend up to $1 million.

“The ability to cash out the credit is extremely attractive to all companies but in particular, start-ups and companies conducting R&D who are in the early stages of commercialisation.”

Mr Duchini said another benefit of the policy to both business and shareholders is the impact on franking credits.

“Ensuring there is no impact on franking credits is a major improvement on the current Australian policy.”