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Income Tax Act 2007

Deductions - Film industry expenditure

DS 1: Acquiring film rights

You could also call this:

“Getting a tax deduction for buying the right to use a completed film”

You can get money back (a deduction) when you spend money to buy the right to use a completed film. This applies whether the film was finished before, during, or after you bought the right to use it.

However, you can’t get this money back if:

  • You run a TV station, network, or cable system and you mainly bought the film right to show the film in New Zealand
  • The film is meant to be an advertisement
  • You spent the money on making the film
  • A different rule (section DS 2B) applies to what you spent

The amount of money you can get back is worked out using special rules (sections EJ 4 or EJ 5), depending on whether it’s a feature film or not.

You can only get money back for buying film rights using this rule or section DS 2B. You can’t use any other rules to get money back for this.

The amount of money you can get back might be reduced if:

  • You paid too much for the film rights (section GB 17)
  • You made a special deal to buy film rights or spend money on making films (section GB 18)

This rule lets you get money back even if you usually can’t for this kind of spending (it overrides the capital limitation). But you still need to follow the general permission and 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=DLM1514020.

Topics:
Money and consumer rights > Taxes
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DS 2: Film production expenditure, or

“Rules for claiming deductions on film production costs”

Part D Deductions
Film industry expenditure

DS 1Acquiring film rights

  1. A person is allowed a deduction for expenditure that they incur in acquiring a film right, if the film is completed, whether it is completed before, at the time, or after the film right is acquired.

  2. This section does not apply to expenditure that a person incurs in acquiring a film right if—

  3. the person operates a television station, a television network, or a cable television system, and the film right is acquired mainly to enable the film to be broadcast in New Zealand; or
    1. the film is intended to be shown as an advertisement; or
      1. the expenditure is film production expenditure; or
        1. section DS 2B applies to the expenditure.

          1. The deduction is allocated under section EJ 4 (Expenditure incurred in acquiring film rights in feature films) or EJ 5 (Expenditure incurred in acquiring film rights in films other than feature films).

          2. No other deduction for expenditure incurred in acquiring a film right is allowed under a provision of this Act other than section DS 2B.

          3. The amount of the deduction may be reduced under—

          4. section GB 17 (Excessive amounts for film rights or production expenditure):
            1. section GB 18 (Arrangements to acquire film rights or incur production expenditure).

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

              Compare
              Notes
              • Section DS 1(2): substituted (with effect on 1 April 2008), on , by section 16(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
              • Section DS 1(4): amended, on , by section 345(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).