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New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Employee or contractor expenditure

DC 7: Contributions to employees’ superannuation schemes

You could also call this:

“Employers can deduct payments made to staff retirement savings plans”

If you’re an employer, you can deduct superannuation contributions you make to your employees’ superannuation schemes. This deduction is taken in the same income year that you make the contribution.

However, there’s an exception to when you can claim this deduction. Section EJ 21 might change when you can claim it, so you should check that section too.

This rule about deducting superannuation contributions overrides the capital limitation. This means you can deduct these contributions even if they’re capital expenses. But remember, you still need to meet the general permission, and the other general limitations still apply.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513772.

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

DC 7Contributions to employees’ superannuation schemes

  1. An employer is allowed a deduction for a superannuation contribution to an employees’ superannuation scheme.

  2. Repealed

  3. The deduction is allocated to the income year in which the employer makes the contribution.

  4. Subsection (2) is overridden by section EJ 21 (Contributions to employees’ superannuation schemes).

  5. This section overrides the capital limitation. The general permission must still be satisfied and the other general limitations still apply.

Compare
Notes
  • Section DC 7(1): amended (with effect on 1 April 2008), on , by section 82(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
  • Section DC 7(1B) heading: repealed, on , pursuant to section 52 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
  • Section DC 7(1B): repealed, on , by section 52 of the Taxation (Urgent Measures and Annual Rates) Act 2008 (2008 No 105).
  • Section DC 7 list of defined terms superannuation contribution: inserted (with effect on 1 April 2008), on , by section 82(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
  • Section DC 7 list of defined terms tax credit: inserted, on , by section 124(2) of the Taxation (KiwiSaver) Act 2007 (2007 No 110).