Excluded expenditure

What expenditure am I not able to claim for?

You can’t include any of the following expenditure in your RDTI claim:

Property-related expenditure

expenditure incurred in acquiring depreciable property or that would be depreciable in the absence of an election under section EE 8 of the Income Tax Act 2007
expenditure that contributes to the cost of depreciable tangible property (other than prototypes) or tangible property that would be depreciable in the absence of an election under section EE 8 of the Income Tax Act 2007 (limited exceptions may apply)
depreciation on property to the extent the cost of the property is eligible expenditure
depreciation on pooled property where an item in the pool is not used solely in performing R&D
certain amounts of depreciation when property is acquired from an associate
expenditure to acquire an interest in intangible property other than software

Expenditure related to associates

Land-related expenditure

Expenditure supported by other tax credits or grants

expenditure for which you have received an R&D tax credit from another country
expenditure that relates to a government or local authority grant (some exceptions apply in relation to the Ministry of Business, Innovation and Employment (MBIE) project grants)

Expenditure outside spending thresholds

if your eligible expenditure is less than $50,000, expenditure or loss that is not for an approved research provider (ARP)
amounts in excess of $120m unless you have approval for a higher amount (this includes any amounts spent by your associates on R&D)

Expenditure outside value thresholds

expenditure on goods or services in excess of market value
depreciation when an asset is written off or sold below its adjusted tax value
expenditure on inputs used, or subject to a process or transformation, to the extent the expenditure does not exceed the value of the output from that expenditure (feedstock rule)

Certain software-related expenditure

expenditure on bespoke software
internal software development expenditure in excess of $25m (this includes any amounts spent by your associates on R&D)

GST, interest and finance

Expenditure on discouraged activities

expenditure incurred by petroleum miners, mineral miners or a person who would be a mineral miner of geothermal energy (limited exceptions may apply)

Non-eligible R&D-related activities

the cost of acquiring technology that is used as a basis for further R&D activities
expenditure to commercialise the results of R&D activity

Doubled up expenditure

Other types of excluded expenditure