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Income Tax Act 2007

Income - Exempt income

CW 38: Public authorities

You could also call this:

"Income from some government organisations is tax-free"

Illustration for Income Tax Act 2007

You get exempt income from a public authority's sinking funds. A public authority's other income is also exempt. But this does not apply to income from some public authorities, like the Public Trust or State enterprises, or to income derived as a trustee, unless it is distributed as beneficiary income to a beneficiary who gets exempt income. You can find more information about a VCF investment vehicle in section 25 of the Venture Capital Fund Act 2019. A company treated as wholly owned by the Crown under section HR 4B is also exempt. A public authority includes the Reserve Bank of New Zealand. Some public authorities, like mixed-ownership enterprises, do not get exempt income.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513260.

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Part CIncome
Exempt income

CW 38Public authorities

  1. An amount of income derived from sinking funds relating to the debt of a public authority is exempt income.

  2. Any other amount of income derived by a public authority is exempt income.

  3. Subsection (2) does not apply to an amount of income that a public authority derives as a trustee, other than an amount distributed as beneficiary income to a beneficiary who derives the amount as exempt income.

  4. Subsection (2) does not apply to a public authority to the extent to which it is a superannuation scheme.

  5. Subsection (2) does not apply to an amount of income derived by the following public authorities:

  6. Public Trust:
    1. State enterprises:
      1. Crown Research Institutes:
        1. a Fund investment entity:
          1. a VCF investment vehicle as referred to in section 25 of the Venture Capital Fund Act 2019:
            1. a company that is treated as being wholly owned by the Crown under section HR 4B (Activities relating to New Zealand Superannuation Fund and VCF).

              1. Subsection (2) does not apply to an amount of income derived by a mixed-ownership enterprise.

              2. In this section, public authority includes the Reserve Bank of New Zealand.

              Compare
              Notes
              • Section CW 38(1) heading: replaced (with effect on 1 April 2008), on , by section 97(1) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
              • Section CW 38(2) heading: replaced (with effect on 1 April 2008), on , by section 97(2) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
              • Section CW 38(3): amended, on , by section 28 of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
              • Section CW 38(5)(d): replaced, on , by section 13(1) of the New Zealand Superannuation and Retirement Income (Controlling Interests) Amendment Act 2024 (2024 No 16).
              • Section CW 38(5)(db): inserted, on , by section 17 of the New Zealand Superannuation and Retirement Income Amendment Act 2019 (2019 No 77).
              • Section CW 38(5)(e): inserted, on , by section 4 of the Taxation (New Zealand Superannuation and Retirement Income) Act 2015 (2015 No 94).
              • Section CW 38(5)(e): amended, on , by section 17 of the New Zealand Superannuation and Retirement Income Amendment Act 2019 (2019 No 77).
              • Section CW 38(5B) heading: inserted, on , by section 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).
              • Section CW 38(5B): inserted, on , by section 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).
              • Section CW 38 list of defined terms Fund investment entity: inserted, on , by section 13(2) of the New Zealand Superannuation and Retirement Income (Controlling Interests) Amendment Act 2024 (2024 No 16).
              • Section CW 38 list of defined terms mixed-ownership enterprise: inserted, on , by section 11 of the Public Finance (Mixed Ownership Model) Amendment Act 2012 (2012 No 45).
              • Section CW 38 list of defined terms VCF: inserted, on , by section 17 of the New Zealand Superannuation and Retirement Income Amendment Act 2019 (2019 No 77).