Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Employee or contractor expenditure

DC 8: Attribution of personal services

You could also call this:

“How income from personal services can be assigned to you”

When someone else’s income is counted as yours because of special rules about personal services, this law explains what happens. These rules are found in sections GB 27 to GB 29.

The person or company whose income is being counted as yours (called the associated entity) can take off the amount of money that’s now counted as yours from their own income. This is called a deduction.

The associated entity can take off this money in the same year that it’s counted as your income.

This rule is allowed under the general permission for deductions and it overrides any other general limits on 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=DLM1513774.

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

DC 8Attribution of personal services

  1. This section applies when, under sections GB 27 to GB 29 (which relate to the attribution rule for income from personal services), an amount of income of a person (the associated entity) is attributed to another person (the working person).

  2. The associated entity is allowed a deduction for the amount attributed.

  3. The deduction is allocated to the income year in which the amount is attributed to the working person.

  4. This section supplements the general permission and overrides all the general limitations.

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