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New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Employee or contractor expenditure

DC 5: Payments to spouses, civil union partners, or de facto partners: services

You could also call this:

“Approval needed for deducting payments to partners for business-related services”

You cannot deduct payments you make to your spouse, civil union partner, or de facto partner for services unless you get approval from the Commissioner. The Commissioner might approve the deduction if they think the payment is for actual services, not for housework or other home-related tasks. The payment must be only for earning your assessable income. You need to get approval before you claim the deduction.

There’s a rule in section GB 23 about paying too much to relatives that overrides this rule. This rule also overrides the general permission for 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=DLM1513768.

Topics:
Money and consumer rights > Taxes
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Part D Deductions
Employee or contractor expenditure

DC 5Payments to spouses, civil union partners, or de facto partners: services

  1. A person is denied a deduction for a payment to their spouse, civil union partner, or de facto partner for services without the Commissioner’s approval.

  2. The Commissioner may approve the deduction only if—

  3. the Commissioner considers that the payment is for services rendered; and
    1. the services are not domestic services or otherwise services connected with the home; and
      1. the payment is incurred by the person exclusively in deriving their assessable income; and
        1. the approval is granted before the deduction is claimed.

          1. This section is overridden by section GB 23 (Excessive remuneration to relatives).

          2. This section overrides the general permission.

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