Gordon Campbell | Parliament TV | Parliament Today | News Video | Crime | Employers | Housing | Immigration | Legal | Local Govt. | Maori | Welfare | Unions | Youth | Search

 

R&D Incentive is ‘light on detail.’

Commentary from Praveen Mistry, Director of Tax Services at William Buck Chartered Accountants and Advisors New Zealand.

New Zealand government must release clear guidelines for the Research & Development tax regime to give more certainty to innovative companies.

The government announced in the national budget a reintroduction of the regime, with the aim of increasing R&D spending from 1.3 percent of GDP to 2 per cent of GDP, effective 1 April 2019.

Praveen Mistry Director of Tax Services at William Buck Chartered Accountants and Advisors says he welcomes the proposed regime, although it is light on details.

“We welcome this announcement in an effort to kick-start more innovation in New Zealand, where eligible R&D spending over $100,000 per annum and up to a maximum of $120 million will receive a 12.5% non-refundable tax credit,” he said.

“However, more guidance is necessary to give clarity to companies so they can start planning now to be globally competitive,” Mistry said.

Mistry says to increase certainty, work needs to be done on how the proposed rules will operate. “The most obvious area of uncertainty is how the rules will apply to software development expenditure and how it will be treated,” he said.

“With software development being a major part of R & D spending in the modern world, this should be a major part of the government’s plan,” Mistry says.

“Major reform has occurred in countries such as Australia, where ineligible activities – particularly in software- are considered ‘business as usual,” he says.

Mistry says the Government must also consider current issues and contexts. “The government must consider how existing companies with R&D spend will be treated, as well as if those companies who have received innovation grants from the Government will be eligible,” Mistry says.

“Furthermore, will overseas companies with local operations with R&D spend in New Zealand be able to access the incentive?” he says.

Mistry says the administrative function also raise questions. “In the past, the Inland Revenue Department administered the incentive. It is uncertain what the needs around this are,” Mistry said.

“The government’s announcement is a good start, particularly for many of our clients and companies that rely a lot on innovation and new technology development as part of their business,” he says.

“However, without clear guidance, the government runs the risk of missing an opportunity to increase innovation in a rapidly changing global market place,” he says.

ENDS


© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Teachers Strike: Nationwide Rallies And Marches

Teachers and principals voted for a full day strike to be held on 15 August to send a strong message to the Government that the current collective agreement offers from the Ministry of Education would not fix the crisis in teaching.

"There needs to be better investment in education so every child can reach their potential and we have enough teachers for every class", said NZEI Te Riu Roa lead principal negotiator Louise Green. More>>

 

Wellington.Scoop: City Council Ends Its Support For Jackson’s Movie Museum

The Wellington City Council and the Movie Museum Limited have today announced a mutually-agreed parting of the ways for a joint project between the Council’s Convention Centre and TMML’s Movie Museum... Both parties remain optimistic for the future of their respective projects. More>>

Pay Equity: Historic Settlement For Education Support Workers

The New Zealand Educational Institute (NZEI) and the Ministry of Education today signed Terms of Settlement to address a pay equity claim for 329 support workers who work with very young children in early childhood and primary schools. More>>

ALSO:

Gordon Campbell: On The Stereotypes About Jacinda Ardern

Routinely, female politicians get depicted as either show ponies or battle axes, with little room for anything else in between. .. More>>

Weekend Interviews: "Discriminatory And Racist" Aussie Deportations

The former president of Australia’s Human Rights Commission Gillian Triggs says deportations have risen dramatically in Australia since 2014 when ministers and ministerial delegates were given the power to cancel visas - and half of those being deported are New Zealanders. "These are massive numbers, actually escalating dramatically."... More>>

ALSO:

Legal Challenge: Prisoner Has 9 Boxes Of Documents Seized

Human rights organisation People Against Prisons Aotearoa says a prisoner they advocate for has had 9 boxes of legal documents seized from him just days before his case against the Department of Corrections was to be heard. More>>

Single-Use Plastic Bags: Govt To Phase Them Out

Single-use plastic shopping bags will be phased out over the next year, Prime Minister Jacinda Ardern and Associate Environment Minister Eugenie Sage announced today. More>>

ALSO:

Lesser Politicians: ACT Conference Promises Fewer Politicians

Party Leader David Seymour today revealed his Smaller Government Bill which will reduce the size of Parliament to 100 MPs, limit the size of the Executive to 20 Ministers, and remove the Maori seats. More>>

ALSO:

 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages