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Income Tax Act 2007

Deductions - Petroleum mining expenditure

DT 3: Acquisition of privileges and permits

You could also call this:

“Tax rules for buying oil exploration permits or privileges”

When you buy a special permit or privilege from someone who finds and drills for oil (a petroleum miner), you can count the money you spent as a cost in the same year the miner sells it to you. This applies if what you’re buying is a licence to look for oil, a permit to search for oil, or a permit to explore for oil. The money you spend to get these permits must be what’s called “petroleum exploration expenditure”. This rule helps you understand when you can count this cost for your taxes.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514049.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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DT 2: Arrangement for petroleum exploration expenditure and disposal of property, or

“Rules for claiming deductions on petroleum exploration expenses and property sales”

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DT 4: Acquisition of exploratory material, or

“Buying exploration materials from petroleum miners counts as your own exploration costs”

Part D Deductions
Petroleum mining expenditure

DT 3Acquisition of privileges and permits

  1. The consideration that a person pays to acquire a privilege or permit referred to in subsection (2) from a petroleum miner is incurred in the income year in which the petroleum miner disposes of the privilege or permit to the person.

  2. Subsection (1) applies to the person and a privilege or permit if—

  3. the consideration that the person pays to acquire the privilege or permit is petroleum exploration expenditure; and
    1. the privilege or permit is—
      1. an existing privilege that is a prospecting licence granted under Part 1 of the Petroleum Act 1937:
        1. a prospecting permit for petroleum:
          1. an exploration permit for petroleum.

          Notes
          • Section DT 3: replaced (with effect on 1 April 2008 and applying for the 2008–09 and later income years but not applying to a person in relation to a tax position taken by the person for an arrangement entered into before 26 February 2015; and relying upon the definition of petroleum exploration expenditure as it was before the amendment made by section 235(44) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016), on , by section 109(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).