In-year payments to boost Kiwi innovation

The RDTI was launched in 2019 to support businesses doing research and development (R&D) by providing a 15% credit on eligible R&D expenditure at the end of the tax year.

The introduction of in-year payments is considered a global first. It enables businesses to receive this credit as regular payments throughout the year, aiding cashflow to boost innovation.

The RDTI has already supported over $1.7 billion of eligible research and development activities, which corresponds to $250 million in tax credits for innovative Kiwi businesses. It is hoped the introduction of in-year payments will help grow this even further.

In-year payments will be available for all RDTI-eligible businesses, but early-stage start-ups and other pre-profit R&D-intensive businesses will benefit the most. This is because early payments help businesses manage cashflow – particularly salary costs – instead of having to wait until after they have submitted their income tax return at the end of the tax year to receive support.

The in-year payments will be provided through an interest-free government loan, with cash payments at regular intervals during the year based on the business’s R&D expenditure. This loan will be repayable when the corresponding RDTI credit is available.

More information

More information is available at:

• Research and Development Tax Incentive (RDTI) website(external link) 
• Tax credit boosts cash flow for Kiwi innovators(external link) — Beehive