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Income Tax Act 2007

Deductions - Forestry expenditure

DP 2: Plant or machinery

You could also call this:

“Deductions for machinery used in forestry businesses”

You can get a deduction for plant or machinery if you use it for forestry in New Zealand. This applies in two situations:

First, if you buy plant or machinery on or after 1 April 1975, use it for the first time on or after that date, and use it mainly to develop land in New Zealand for a forestry business you plan to run there.

Second, if you’re already running a forestry business in New Zealand, you can get a deduction if you buy plant or machinery on or after 1 April 1975, use it for the first time on or after that date, and use it mainly for planting or looking after trees on your land.

In both cases, you can claim a deduction for the loss in value (depreciation) of the plant or machinery. This rule overrides the usual rule about capital expenses, but you still need to meet the general permission and follow other general limitations.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1513978.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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DP 1: Expenditure of forestry business, or

“Claiming expenses for your forestry business in New Zealand”

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DP 3: Improvements to forestry land, or

“Tax deductions for improving forestry land”

Part D Deductions
Forestry expenditure

DP 2Plant or machinery

  1. This section applies when—

  2. a person incurs expenditure on acquiring, on or after 1 April 1975, plant or machinery; and
    1. the person first uses the plant or machinery on or after 1 April 1975; and
      1. the person uses the plant or machinery mainly in developing land in New Zealand for use in a forestry business to be carried on by them on the land.

        1. This section also applies when—

        2. a person carrying on a forestry business on land in New Zealand incurs expenditure on acquiring, on or after 1 April 1975, plant or machinery; and
          1. the person first uses the plant or machinery on or after 1 April 1975; and
            1. the person uses the plant or machinery mainly in planting or maintaining trees on the land.

              1. The person is allowed a deduction for an amount of depreciation loss for the plant or machinery.

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

              Compare
              Notes
              • Section DP 2 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).