Tax Expenditures Included in the Income Tax Act 2007[3]

Accelerated depreciation: deferral

Sections DO 4-5, 12, DP 3, DZ 17-18, EE31 of the Income Tax Act 2007

The ability to depreciate capital items faster than their economic life reduces income by a greater amount in earlier years (deferring tax payments).

Bodies promoting amateur games and sports: exempt income

Section CW 46 of the Income Tax Act 2007

Income derived by a club, society or association is exempt income, providing it is established to promote an amateur game or sport and no funds are used for private pecuniary profit.

Bodies promoting scientific or industrial research: exempt income 

Section CW 49 of the Income Tax Act 2007

Income derived by a society or association established mainly to promote or encourage scientific or industrial research is exempt income, providing the society or association is approved by the Royal Society of New Zealand and no funds are used for private pecuniary profit.

Certain income derived by transitional residents: exempt income

Sections CW 27 and HR 8 of the Income Tax Act 2007

New tax residents in New Zealand can gain a temporary tax exemption for up to four years on most foreign-sourced income.

Charitable or other public benefit gifts by a company: deduction 

Section DB 41 of the Income Tax Act 2007

A company is allowed a deduction for a charitable donation or other gift that produces a public benefit when made to a society, institution, association, organisation, trust, or fund set out in schedule 32 of the Income Tax Act 2007.

Charitable or other public benefits: tax credit 

Section LD 1-3 of the Income Tax Act 2007

A person who makes a charitable or other public benefit gift may under certain conditions is allowed a refundable tax credit. Payroll donations are allowed under sections LD 4-8.

Charities: exempt income

Sections CW 41-43 of the Income Tax Act 2007

Business, non-business and charitable bequests are exempt income for registered charitable entities.

Child tax credit

Section LC 3 of the Income Tax Act 2007

A tax credit of up to $292.50 is available to children, as defined in the Act, for each tax year.

Community trusts: exempt income

Section CW 52 of the Income Tax Act 2007

Income derived by the trustee of a community trust is exempt income.

Farming and aquaculture business expenditure

Section DO 1-13 of the Income Tax Act 2007

Deductions granted for improvements and enhancements to land for farming and aquaculture can be expensed rather than treated as capital.

Film industry expenditure: deduction

Section DS 1-4 of the Income Tax Act 2007

Expenditure incurred acquiring film rights can be expensed over a specified time frame.

Forestry expenditure: deduction 

Section DP 1 & DP 5 of the Income Tax Act 2007

Expenditures associated with forestry (ie, improvements or planting costs) can be expensed rather than treated as capital improvements.

Friendly societies: exempt income

Section CW 44 of the Income Tax Act 2007

Specified income derived by a friendly society is treated as exempt income.

Funeral Trusts: exempt income

Section CW 45 of the Income Tax Act 2007

Interest or a dividend derived by a trustee in a funeral trust is exempt income.

Herd improvement bodies: exempt income

Section CW 51 of the Income Tax Act 2007

Specified income derived by a herd improvement association, or society established mainly to promote an improvement in New Zealand dairy cattle, is exempt income.