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Innovative Kiwi businesses investing in research and development (R&D) will benefit from two new tax measures as part of Budget 2014, Science and Innovation Minister Steven Joyce and Revenue Minister Todd McClay say.

As a result of Budget changes, loss-making start-up companies will be able to cash out all or part of their tax losses from R&D expenditure, while all businesses will be allowed tax deductibility for R&D “black hole” expenditure that is currently neither deductible nor able to be depreciated.

Science and Innovation Minister Steven Joyce and Revenue Minister Todd McClay today released a Government consultation document, Black hole R&D expenditure, which seeks feedback on proposals to resolve problems around the tax deductibility of certain types of business-related research and development expenditure.

Science and Innovation Minister Steven Joyce and Revenue Minister Todd McClay today welcomed the release of an Inland Revenue Department tax policy paper which seeks public feedback on proposals to improve cash flow and remove tax distortions on research and development costs for start-up Kiwi businesses.