R&D Tax Credits appear to be making a comeback, with the Labour-NZ First coalition agreement confirming they will boost R&D spending to 2% of GDP over 10 years, something NZ is currently lagging behind in.

Labour's R&D Tax Credit of 15% was axed by the National Government when first elected in 2008, with the Tax credit scheme only being available for one year. This was replaced by a Grants scheme run by Callaghan Innovation, and sometime later supported by the introduction of the cash out of R&D losses scheme in 2015.

Labour's campaign committed to a re-introduction of a 12.5% tax credit, which is likely to be welcomed by businesses, especially those who could not meet Callaghan's criteria for grants and who will be hoping that the tax credits are here to stay for longer this time.

While there is still little detail as to the future of Callaghan and whether the cash out scheme will stay, we are hoping that a new tax credit scheme will be as simple as possible to keep the compliance costs to a minimum.

We will keep you informed as more information comes to hand.