The NZ 2025 Tax Year is Ending – Can you Still Claim an R&D Tax Refund?
The 2025 deadlines for NZ’s two R&D tax credits are fast approaching. Learn what is available and how to apply.
What R&D Funding is Available?
If your business isn’t yet claiming tax credits for your Research and Development (R&D) expenses, 2025 might be the year you take up the opportunity. With possible cash refunds of between 15% and 43% of your R&D expenses, you don’t want to miss out.
New Zealand offers tax credits and cash refunds for your R&D activities through two separate programs:
- 15% of costs – R&D Tax Incentive (RDTI)
- 28% of costs – R&D Loss Tax Credit
In the current claim period, a business can access these credits for their R&D expenses from between April 2024 and March 2025. What’s more, many businesses can claim R&D expenses from the year prior to that too.
Most private-sector NZ businesses who conduct R&D can access the RDTI. If the business also makes a loss in the tax year, they may also be able to access the R&D Loss program. Your business can be eligible for both at the same time, giving up to 43% benefit.
Both these programs remain open even with the recent changes to New Zealand’s science sector.
You Don’t Have To Be Paying Income Tax Yet
Some businesses in their early stage don’t yet pay income tax, so they hesitate to apply for any kind of tax incentives.
Good news – you can still apply, both these programs can deliver annual cash refunds, even if you have no tax to pay in the year.
Major NZ R&D Tax Credit Deadlines
For most businesses, your tax year ends 31 March, and these deadlines will apply:
If you have a non-standard tax year then these deadlines will be different.
*Assumes you have a tax agent or standard ‘extension of time’
**These dates apply if you have no tax agent or extension of time
How to Claim R&D Credits for the 2025 Tax Year
To claim the RDTI for the 2025 tax year, businesses must first register their eligible R&D activities with Callaghan Innovation by 30 June 2025 (for a standard March balance date). This involves clearly describing the scientific or technological uncertainty being addressed, along with the systematic approach taken to resolve it. Throughout the year, businesses need to maintain accurate records of R&D expenditure, including wages, materials, and overheads, ensuring costs are directly linked to the registered activities. At year-end, a supplementary return must be filed with Inland Revenue alongside the income tax return, detailing the associated eligible expenditure. Following this you will receive a credit against tax payable, or a refund if applicable.
For businesses operating at a loss and claiming the R&D Loss Tax Credit, you must first register through Inland Revenue before filing the income tax return. This confirms your intention to claim the credit and helps Inland Revenue assess eligibility. Once registered, the next step is to apply for the credit alongside your annual tax return, specifying the amount of eligible R&D expenditure and confirming that you’re in a tax loss position. Within this application you will also be describing how your activities meet the definitions of R&D. This is like the RDTI, but oddly enough the definition of R&D is different in each program. Record-keeping is essential throughout the year, so you’ll need detailed documentation of your R&D activities and associated costs to support the claim. If approved, the credit is paid out as a cash refund.
How to Claim R&D Credits from the 2024 Tax Year
For many NZ businesses on a 31 March tax year, it may still be possible to claim for R&D done in the 2024 tax year. This happens when you have an ‘extension of time’ for filing tax returns, which is standard for every business who has a tax agent.
Did you make a loss?
If you reported a loss in the 2024 year, your deadline for claiming 2024 R&D expenditure from the R&D Loss Tax Credit is 30 April 2025 (under extension-of-time arrangements). You can also claim 2024 costs via the RDTI as for a profitable business (below).
Did you make a profit?
If you reported a profit in the 2024 year, you may still be able to claim some costs from the RDTI. You will first need to submit a general approval application by 30 June 2025. This describes how your work meets the definitions of R&D for RDTI. As part of this process, you can seek approval for ‘supporting’ work that was done in the 2024 year. When the application is approved, you can them claim the relevant 2024 costs alongside your 2025 claim.
Where Do I Get Started with RDTI and R&D Loss Credits?
If you want to DIY then your first step is to digest the IR1240, and the relevant sections of the Income Tax Act 2007 and the Tax Administration Act 1994.
Before you assess your eligibility, we recommend gaining a good understanding of the regulatory framework to avoid wasted time and non-compliance.
A bit like a mortgage broker or lawyer, a good grants advisor can help you to navigate this process. They might provide:
- advice regarding eligibility,
- preparation of your applications,
- assistance in dealing with regulators,
- accurate calculations of your R&D expenditure, and
- support with your end-of-year claims.
But most importantly – don’t miss the dates, as there are no allowances for late submissions.
Key resources available:
Insights from the team at BlueRock
