From the 2020-21 and future income years, unless you're eligible and elect to be a significant performer, you must get general approval on your R&D activities before claiming the R&D tax credit.
You’ll use the general approval process if either:
- your R&D expenditure will be less than $2 million during the application year
- you choose not to opt into the significant performer regime on some or all of your R&D activities.
If your R&D expenditure will be in excess of $2 million during the application year, you have a choice between either:
- applying for general approval
- electing to be a significant performer.
Electing to be a significant performer for your R&D activities
Support
Callaghan Innovation can support you with your application if you’re new to the R&D tax incentive. Request support on the R&D tax incentive website.
Free tailored R&D tax incentive support - rdti.govt.nz
General approval on your R&D activities
General approval is intended to provide certainty to customers that their activities are eligible for the tax incentive. Applying for general approval is free. Approval is granted before you file your R&D supplementary return and submit your income tax return.
You must describe the core and supporting R&D activities that you are seeking approval for. In your application, you must also set out the income years you want approved. If you expect that your activities will take longer than a year to complete, you may apply for general approval for up to a maximum of three years.
Research and development (R&D) tax incentive credit - eligible R&D activity guidance - March 2021
Eligible R&D activity has a specific statutory definition for the purposes of the tax credit which is not the same as the commercial, engineering or accounting definitions. The tax credit is not just for scientific research but also for development activity that meets the eligibility criteria.
This guidance introduces core R&D activities. If you have eligible core R&D activities, you may also receive the tax credit for supporting R&D activities which are referenced later in the guidance.
ANZSRC codes
When you apply for general approval, you need to include the Australian and New Zealand Standard Research Classification (ANZSRC) code most relevant to your area of research.
ANZSRC is a statistical classification used for R&D measurement and analysis in Australia and New Zealand. The code is for statistical purposes only and will not be used during the appraisal process.
Choose from the full list of ANZSRC codes.
Joint ventures, partnerships and look-through companies
Each individual party to a joint venture, partnership or look-through company needs to either apply for general approval or, if eligible, enrol as a significant performer. To make sure your applications are processed consistently, you and the other individuals should agree on a standard description for your R&D project and activities.
You will also need to apply for general approval for any other R&D activities not undertaken jointly.
If you are completing the general approval process as part of a joint venture, partnership or look-through company, you'll need to give us information relating to each party. For look-through companies, this means you’ll need to give us details of the other look-through company shareholders.
Due date for your general approval application
General approval applications are due by the 7th day of the 2nd month following the end of your income year. For taxpayers with a standard balance date of 31 March, the due date is 7 May.
We encourage you to apply for general approval as soon as you have enough detail. Once approved, your R&D activities are eligible for a claim at the end of the income year. You can apply for new activities to be included even after approval and regardless of being part of a wider project. However, you’ll need to make sure you apply for these changes before the 7th day of the 2nd month following the end of your income year.
Preparation and timeline for general approval
Before making a general approval application, you’ll need to register for the R&D tax incentive.
Register for the research and development tax incentive
Here are some examples of timelines for claiming R&D tax credits according to your situation. If you have a non-standard balance date, adjust your dates accordingly. We do not accept late applications in any of the timelines.
Example - standard balance date with a tax agent and an extension
| Date | Action |
|---|---|
| 7 May 2021 | Due date for your application for general approval. |
| We will review your application before you're required to file your R&D supplementary return. | |
| 31 March 2022 | Your income tax return for the tax year ending 31 March 2021 is due. |
| 30 April 2022 | You must file your R&D supplementary return by this date. |
Example - standard balance date without a tax agent or extension
| Date | Action |
|---|---|
| 7 May 2021 | Due date for your application for general approval. |
| Due to the narrow timeframe, it’s good practice to submit your application earlier than 7 May if you have the information ready. | |
| 7 July 2021 | Your income tax return for the tax year ending 31 March 2021 is due. |
| 6 August 2021 | You must file your R&D supplementary return by this date. |
How to apply for general approval
Once you've registered for the R&D tax incentive (RDTI) and we've processed it, you'll have access to the RDTI account in myIR. You can apply for general approval there.