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Income Tax Act 2007

Deductions - Petroleum mining expenditure

DT 8: Acquisition of certain petroleum mining assets

You could also call this:

“Rules for deducting costs when buying petroleum mining assets”

When you buy a petroleum mining asset from a petroleum miner, you can deduct the cost in the same tax year that the petroleum miner sells it to you. This applies to most petroleum mining assets, but not to certain privileges or permits.

You can’t use this rule for privileges or permits if the money you spend to get them is counted as petroleum exploration expenditure. These special cases include old prospecting licences given out under Part 1 of the Petroleum Act 1937, current prospecting permits for petroleum, and exploration permits for petroleum.

For these special permits and privileges, different rules apply to when you can deduct the cost. These rules aren’t explained in this section, but they might be found in other parts of the tax law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514060.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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Part D Deductions
Petroleum mining expenditure

DT 8Acquisition of certain petroleum mining assets

  1. The consideration that a person pays to acquire a petroleum mining asset, excluding 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 petroleum mining asset to the person.

  2. For the purposes of subsection (1) for a person, a privilege or permit is excluded 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 8: 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 110(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).