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New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 19: Expenses in application for resource consent

You could also call this:

“Tax deductions for unused resource consent application costs”

If you spend money to apply for a resource consent under the Resource Management Act 1991, you can get a tax deduction in certain situations. This applies when you don’t get the resource consent because you didn’t submit the application, you withdrew it, or it was refused. It also applies if you got the consent but didn’t use it before it expired or you gave it up.

You can claim a deduction for the money you spent on the application or planned application. This includes costs that would have been part of depreciable property or other deductible expenses if the application had been successful or if you had used the resource consent. However, you can only claim for expenses that aren’t covered by other tax deductions.

You can claim this deduction in the tax year when you decide not to submit the application, withdraw it, or get refused. If you got the consent but didn’t use it, you can claim when it expires or when you give it up.

This rule overrides the usual rule about capital expenses, but you still need to follow the general permission and other general limits for tax deductions.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513616.

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Part D Deductions
Specific rules for expenditure types

DB 19Expenses in application for resource consent

  1. This section applies when a person who incurs expenditure for the purpose of applying for the grant of a resource consent under the Resource Management Act 1991—

  2. does not obtain the grant because the application is not lodged or is withdrawn, or because the grant is refused:
    1. obtains the grant but does not use the resource consent before it lapses or is surrendered.

      1. The person is allowed a deduction for the expenditure—

      2. that the person incurs in relation to the application or intended application; and
        1. that would have been part of the cost of depreciable property, or otherwise a deduction, if the application or intended application had been granted or if the resource consent had been used; and
          1. for which the person is not allowed a deduction under another provision.

            1. The deduction is allocated to the income year in which—

            2. the person decides not to lodge the application, withdraws the application, or is refused the grant; or
              1. the resource consent lapses or is surrendered.

                1. This section overrides the capital limitation. The general permission and other general limitations still apply.

                Compare
                Notes
                • Section DB 19 heading: replaced (with effect on 1 April 2014), on , by section 43(1) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                • Section DB 19(1) heading: replaced (with effect on 1 April 2014 and applying for the 2014–15 and later income years), on , by section 43(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                • Section DB 19(1): replaced (with effect on 1 April 2014 and applying for the 2014–15 and later income years), on , by section 43(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                • Section DB 19(1): amended, on , by section 6 of the Resource Management (Natural and Built Environment and Spatial Planning Repeal and Interim Fast-track Consenting) Act 2023 (2023 No 68).
                • Section DB 19(1B) heading: inserted (with effect on 1 April 2014 and applying for the 2014–15 and later income years), on , by section 43(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                • Section DB 19(1B): inserted (with effect on 1 April 2014 and applying for the 2014–15 and later income years), on , by section 43(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                • Section DB 19(2): replaced (with effect on 1 April 2014 and applying for the 2014–15 and later income years), on , by section 43(3) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                • Section DB 19 list of defined terms accounting year: repealed, on , by section 48 of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).