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Income Tax Act 2007

Income - Exempt income

CW 23: Income for military or police service in operational area

You could also call this:

“Tax-free income for military and police serving in operational areas”

If you’re a member of the New Zealand Defence Force or the police and you serve in an operational area, you don’t have to pay tax on some of the money you earn. This includes an operational allowance, which is extra money the Government pays you just for being in that area. It’s not the same as your regular pay or bonuses for staying in the force longer.

A special group of important government ministers, including the Prime Minister, can also decide to make other money you earn in an operational area tax-free.

An operational area is a place where the Minister of Defence has sent New Zealand Defence Force members for a special mission approved by the Government. The Chief of Defence Force decides exactly where this area is for each mission.

This law helps to recognise the difficult and dangerous work you might do in these areas by letting you keep more of the money you earn there.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513208.

Topics:
Money and consumer rights > Taxes
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“Tax exemption for overseas experts and trainees visiting NZ under government agreements”

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CW 24: Deferred military pay for active service, or

“Tax-free pay for military service overseas”

Part C Income
Exempt income

CW 23Income for military or police service in operational area

  1. This section applies when a member of the New Zealand Defence Force or the police (the member) derives income for serving in an operational area.

  2. The following are exempt income of the member:

  3. an operational allowance:
    1. an amount that the ministerial committee decides under subsection (3) is exempt income.

      1. A ministerial committee that includes the Prime Minister, the Minister of Defence, the Minister of Police, the Minister of Finance, and the Minister of Foreign Affairs may, for the purposes of subsection (2)(b), decide that an amount of income derived by a member for being in an operational area is exempt income.

      2. In this section,—

        operational allowance, for a member, means the amount of an allowance payable by the Government of New Zealand that—

        1. is paid directly and solely to the member for being in an operational area; and
          1. is not—
            1. a regular force gratuity:
              1. a bonus or bounty for re-engagement in a regular force

              operational area means an area—

              1. to which the Minister of Defence has ordered the deployment of New Zealand Defence Force members for a specific mission authorised by the Government; and
                1. that the Chief of Defence Force delineates for that mission.

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