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New Zealand law explained for everyone

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 have a forestry business in New Zealand, you can claim a deduction for certain expenses. You can claim expenses for things like administrative costs, interest on loans, and insurance premiums. You can also claim expenses for planting and maintaining trees, applying fertiliser, and controlling diseases and pests.

You can claim expenses for repairing and maintaining equipment and land improvements used for your forestry business. This includes things like access tracks built for a specific purpose and used for less than 12 months. You can also claim the cost of trees that are lost or destroyed.

Although timber is considered revenue account property, you claim these deductions under section BD 4(2), not section EA 2(2). This section overrides the capital limitation, but you still need to meet the general permission and other limitations.

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This page was last updated on

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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DP 2: Plant or machinery, or

"Deductions for machinery used in forestry businesses"

Part DDeductions
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:
            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(1)(e): amended (with effect on 1 April 2008), on , by section 44(1) (and see section 44(2) for application) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
                        • 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).