R&D Tax Credits and Callaghan Innovation Grants for New NZ Companies

R&D Tax Incentive for New NZ Companies

New Zealand's R&D Tax Incentive (RDTI) allows companies to claim a 15% tax credit on eligible research and development expenditure. For a newly-incorporated tech company spending NZ$100,000 on R&D in year one, that is NZ$15,000 back -- a meaningful cash flow benefit in the critical first year.

The scheme is administered by Inland Revenue in partnership with Callaghan Innovation. Eligible spend includes salaries for R&D staff, contractor costs directly related to R&D activities, materials consumed in R&D, and a portion of overhead costs attributable to R&D work.

Who Qualifies

To qualify, a company must be a NZ resident company (or have a PE in NZ), perform eligible R&D activities in NZ, spend at least NZ$50,000 on eligible R&D in the income year, and maintain contemporaneous records of all R&D activities.

Software development, biotech, agritech, cleantech, and advanced manufacturing companies are among the most common claimants. Even a first-year company developing a proprietary platform or unique process may qualify.

Callaghan Innovation Grants

Beyond the RDTI, Callaghan Innovation offers direct funding. Project Grants provide up to 40% co-funding on collaborative R&D with a Crown Research Institute or university. Getting Started Grants offer up to NZ$5,000 for businesses new to R&D. Student Grants co-fund hiring engineering or science students on R&D projects.

These grants stack with the RDTI -- a company can claim both for the same R&D programme, providing significant leverage on private investment.

The Accountant's Role

For an accounting firm advising newly-registered companies, R&D funding is a high-value conversation to have early. The earlier an accountant identifies R&D activity, the better: contemporaneous records are required, and retrospective claims are harder to defend.

Practical steps: assess whether the company's activities constitute systematic investigation under the RDTI definition; set up time-tracking or project coding in Xero from day one; calculate whether the NZ$50,000 minimum threshold will be met; refer to Callaghan Innovation for a getting-started conversation; build an R&D grant application into the advisory roadmap for year two.

Timing Matters

New companies are often unaware of the RDTI until well into their second year, by which point they have missed the record-keeping window for year one. An accountant who introduces the concept at the first onboarding meeting differentiates themselves and potentially saves the client NZ$15,000 or more.

FreshFirms alerts accountants the moment a new company registers in their region -- making it easy to be the first to have this conversation before competitors even know the company exists. Start a free trial to see newly-registered companies in your region today.