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Income Tax Act 2007

Deductions - Forestry expenditure

DP 1: Expenditure of forestry business

You could also call this:

“Claiming expenses for your forestry business in New Zealand”

If you run a forestry business on land in New Zealand, you can get money back for certain expenses. These expenses include:

You can claim money back for things like office costs, rates, rent, and insurance. You can also claim for interest on money you borrowed to use in your business.

You can get money back for planting trees and looking after them. This includes putting fertiliser on the land after you’ve planted the trees. You can also claim for controlling diseases, pests, and weeds, but not for clearing other plants away from your trees.

If you use machines or tools to plant trees, look after them, or get the land ready for forestry, you can claim money back for fixing and maintaining these. You can also claim for fixing and maintaining improvements to the land that you use for your forestry business.

You can get money back for building temporary tracks on your land. These tracks must be for a specific purpose and used for no more than 12 months after you build them.

If you lose standing timber or it gets destroyed, you can claim the cost of this.

Even though timber is considered property that makes you money, the rules for claiming these expenses are a bit different. You claim them under a special section of the law called BD 4(2), not under EA 2(2).

This law overrides some other rules about what you can claim for, but you still need to meet the general rules for claiming expenses.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513976.

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Money and consumer rights > Taxes
Business > Industry rules
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DP 2: Plant or machinery, or

“Deductions for machinery used in forestry businesses”

Part D Deductions
Forestry expenditure

DP 1Expenditure of forestry business

  1. A person carrying on a forestry business on land in New Zealand is allowed a deduction for expenditure that they incur on—

  2. administrative overheads, rates, rent, insurance premiums, or other expenses of the same kinds:
    1. interest on money borrowed for the purposes of the business and employed as capital in the business:
      1. planting or maintaining trees on the land:
        1. applying fertiliser after the planting of the trees:
          1. disease control, pest control, or weed control (excluding releasing):
            1. repair or maintenance of plant, machinery, or equipment used by the person mainly in—
              1. planting or maintaining trees on the land; or
                1. preparing or otherwise developing the land for the person’s forestry operations:
                2. repair or maintenance of land improvements, other than trees, effected on the land and used by the person mainly in the business:
                  1. the construction to or on the land of access tracks that are—
                    1. constructed for a specific operational purpose; and
                      1. used for no longer than 12 months after construction:
                      2. the cost of standing timber that is lost or destroyed.

                        1. Although timber is revenue account property, a deduction for expenditure described in subsection (1) is not allocated under section EA 2(2) (Other revenue account property) but under section BD 4(2) (Allocation of deductions to particular income years).

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

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                        Notes
                        • Section DP 1 list of defined terms forestry business: 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).