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NZBio welcomes R&D tax incentives

NZBio welcomes R&D tax incentives

“This year’s budget package provides some very positive changes for New Zealand’s biotechnology sector,” NZBio’s CEO Brian Ward says.

“The announcement of a 15% tax credit for companies undertaking Research &Development (R&D) will be welcomed by the sector and will help encourage more investment in technology development by New Zealand firms.

“The ability to pay this credit in cash to loss making start-up and early stage companies and not capping the tax credit will encourage an increase in private sector R&D activity and brings New Zealand into line with Australia and other OECD countries.

“We are also pleased to see the Government will take a volume-based approach when applying the tax credit, which is the most sensible way to approach R&D expenditure over the life of a project. This is a big win for the industry.

“An incremental approach would only have rewarded companies that increased their annual R&D expenditure, and would not have been practical.
“We are particularly encouraged by the decision to implement an R&D tax incentive. Companies in this sector generally favour this approach over a grant system, as it is a much more efficient mechanism for delivering benefits.

“The design of the scheme also appears to be relatively simple, with research needing to meet a well accepted international definition or be undertaken by approved research providers.

“As the industry body for New Zealand’s biotech sector, NZBio has spent considerable time over the last year discussing R&D tax rebates with politicians and officials in order to ensure that firstly, they were put in place as a part of the business tax review and secondly, that they are implemented in a way that is useful for R&D intensive companies. Today’s budget is a positive step forward.”

ENDS

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