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Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 35: Some definitions

You could also call this:

“Definitions for research and development tax rules”

In this part of the law, you’ll learn about some important words used in section DB 34. These words help explain what counts as research and development for tax purposes.

‘Development’ and ‘research’ are defined by a special set of rules called the ‘new reporting standard’. This standard is based on international rules and can change over time.

There’s also something called the ‘old reporting standard’. This was used before and might still apply in some cases, depending on when you spent money on research or development.

The Governor-General can make special rules to say what doesn’t count as research or development. They can also decide when these rules start to apply.

When the Governor-General makes these rules, they become a type of law called ‘secondary legislation’. This means they have to follow certain steps to become official and be made public.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513662.

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DB 34: Research or development, or

“Tax deductions for research and development spending”

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DB 36: Patent expenses, or

“Deducting costs for patents bought before 23 September 1997”

Part D Deductions
Specific rules for expenditure types

DB 35Some definitions

  1. In this section, and in section DB 34,—

    development is defined in paragraph 8 of the new reporting standard

      new reporting standard means the New Zealand Equivalent to International Accounting Standard 38, in effect under the Financial Reporting Act 2013, and as amended from time to time or an equivalent standard issued in its place

        old reporting standard means Financial Reporting Standard No 13 1995 (Accounting for Research and Development Activities) being the standard approved under the Financial Reporting Act 1993, or an equivalent standard issued in its place, that applies in the tax year in which the expenditure is incurred

          research is defined in paragraph 8 of the new reporting standard.

          1. The Governor-General may make an Order in Council specifying—

          2. a kind of expenditure that is not expenditure on research or development for the purposes of section DB 34:
            1. an activity that is neither research nor development for the purposes of section DB 34:
              1. the date from which the expenditure or the activity is excluded from being research or development.

                1. An Order in Council under subsection (2) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

                Compare
                Notes
                • Section DB 35(1): substituted, on , by section 339 of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
                • Section DB 35(1) development: amended (with effect on 1 April 2015), on , by section 97(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                • Section DB 35(1) new reporting standard: inserted (with effect on 1 April 2008), on , by section 12 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                • Section DB 35(1) new reporting standard: amended, on , by section 126 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
                • Section DB 35(1) old reporting standard: inserted (with effect on 1 April 2008), on , by section 12 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                • Section DB 35(1) reporting standard: repealed (with effect on 1 April 2008), on , by section 12 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                • Section DB 35(1) research: amended (with effect on 1 April 2015), on , by section 97(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                • Section DB 35(3) heading: inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
                • Section DB 35(3): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
                • Section DB 35 list of defined terms new reporting standard: inserted (with effect on 1 April 2008), on , by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                • Section DB 35 list of defined terms old reporting standard: inserted (with effect on 1 April 2008), on , by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                • Section DB 35 list of defined terms reporting standard: repealed (with effect on 1 April 2008), on , by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).