Businesses will receive a $60 million tax break on research
and development spending over the next four years under two
new measures in today's Budget.
Loss making start up companies will be able to "cash out''
all of their tax losses from R&D spending, Science and
Innovation Minister Steven Joyce and Revenue Minister Todd
Also, all businesses will be allowed tax deductibility for
R&D "black hole'' spending which currently is neither
deductible or able to be depreciated.
The first measure means R&D intensive companies will have
early access to all or part of their tax losses in the form
of a cash receipt, rather than carrying those losses forward.
The second means that all capitalised costs on depreciable,
intangible assets such as patents will be deductible over
time. Currently only the legal and administrative costs of
registering such assets are deductible.
In addition, businesses will be entitled to a one off
deduction on capitalised development spending on intangible
assets that are subsequently written off.
Mr Joyce estimate the two moves would return about $58
million in tax over the next four years as part of moves to
``reduce tax hurdles that discourage R&D investment by
Mr Joyce also announced the Government was increasing
contestable science funding by $57 million over three years
from next year onwards.
He also committed an additional $53 million over four years
to establish three new Centres of Research Excellence
The centres are "cross-institutional research networks that
support production of the absolute best research and
researchers in tertiary education institutions across New
The new funding will bring the total number of CoRES
receiving funding to 10.