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Income Tax Act 2007

Income - Exempt income

CW 57: Non-resident company involved in exploration and development activities

You could also call this:

“Tax exemption for overseas companies exploring for oil and gas in New Zealand waters”

If you are a non-resident company doing certain activities to find and develop oil or gas in the sea around New Zealand, you might not have to pay tax on some of your income. This applies to money you earn between 1 January 2020 and 31 December 2024.

The activities that count are called ‘exploration and development activities’. These include using a ship to take special pictures of what’s under the sea floor, or drilling wells to look for oil or gas. But it doesn’t include using a special kind of drilling equipment on an existing platform in the sea.

This rule only applies to areas that are considered ‘offshore permit areas’. These are areas that are part of New Zealand, but they’re in the sea, not on land. They start from where the high tide reaches and go out into the ocean.

Remember, this is just a simple explanation of the law. If you need to know more, you should talk to someone who knows all about tax rules.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513306.

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Part C Income
Exempt income

CW 57Non-resident company involved in exploration and development activities

  1. An amount of income derived by a non-resident company from exploration and development activities in an offshore permit area is exempt income if it is derived in the period that—

  2. starts on 1 January 2020; and
    1. ends on 31 December 2024.

      1. In this section,—

        exploration and development activities—

        1. means the following activities undertaken for the purposes of identifying and developing exploitable petroleum deposits or occurrences in an offshore permit area:
          1. operating a ship to provide seismic or electromagnetic survey readings:
            1. drilling an exploratory well or other well; but
            2. does not include using a drilling rig of modular construction that is installed on an existing offshore platform

              offshore permit area means an area of land that is—

              1. in New Zealand; and
                1. on the seaward side of the mean high-water mark; and
                  1. a permit area or part of a permit area.

                  Compare
                  Notes
                  • Section CW 57(1)(a): replaced, on , by section 51 of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                  • Section CW 57(1)(b): replaced, on , by section 51 of the Taxation (Annual Rates for 2019–20, GST Offshore Supplier Registration, and Remedial Matters) Act 2019 (2019 No 33).
                  • Section CW 57(2) exploration and development activities: replaced, on , by section 34(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).