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Income Tax Act 2007

Income - Exempt income

CW 38: Public authorities

You could also call this:

“Tax rules for public authorities and their income”

When a public authority gets money from sinking funds related to its debt, you don’t have to pay tax on that money. Generally, public authorities don’t have to pay tax on any money they earn.

However, there are some exceptions to this rule. If a public authority is acting as a trustee, it might have to pay tax on some of the money it earns. Also, if a public authority is a superannuation scheme, it might have to pay tax.

Some specific public authorities always have to pay tax on their income. These include Public Trust, State enterprises, Crown Research Institutes, Fund investment entities, VCF investment vehicles, and companies that are treated as if they’re owned by the Crown under section HR 4B. Mixed-ownership enterprises also have to pay tax on their income.

When this law talks about public authorities, it includes the Reserve Bank of New Zealand.

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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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Money and consumer rights > Taxes
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Part C Income
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).