Private sector R&D report welcomed
The government today released the preliminary report of the Private Sector Liaison Group on Research and Development, promising to consider seriously the group's recommendations to improve the R&D rules introduced in 2001.
PricewaterhouseCoopers senior partner, John Shewan, wrote to Revenue Minister Michael Cullen, Research, Science and Technology Minister Pete Hodgson and then Associate Finance and Revenue Minister Paul Swain on 12 May outlining the group's views prior to a meeting with the ministers on 16 June.
"The report confirms that the 2001 changes have achieved what was intended: providing greater certainty by clarifying the tax treatment of R & D through alignment of tax law with accounting practice," Dr Cullen said.
"But it does recommend a number of potential improvements. I want to take this opportunity to thank the members of the group for their work and to assure them that we will give serious consideration to the suggestions they have made."
- Changing the law to make it possible to deduct some "black hole" R&D expenditure;
- Looking at the implications for the new rules of the eventual adoption in New Zealand of international accounting standards; and
- Inland Revenue providing more public guidance on how it applies the rules introduced in 2001.
The group advised that some of its members favoured some form of tax incentive for R&D but noted that this issue went beyond their terms of reference.
John Shewan [senior partner PricewaterhouseCoopers] 04-462-7254 or 0274-507-831
Patricia Herbert [press secretary] 04-471-9412 or 021-270-9013.
Helen Mackenzie [tax advisor to Dr Cullen] 04-471-9728