DZ 11Film reimbursement scheme on or before 30 June 2001

1. Section DS 3 (Clawback of deductions for film reimbursement schemes) does not apply to a deduction for expenditure that relates to a film and is incurred by a person (person A) under a film reimbursement scheme if—

2. the scheme is entered into on or before 30 June 2001; and
3. the film has, under section EJ 6 (Certification of New Zealand films),—
   1. a final certificate that it is a New Zealand film; or
   2. a provisional certificate, not obtained by the provision of materially incorrect information to the New Zealand Film Commission, that it is a New Zealand film; and
4. the film had not been completed before 7 July 1999; and
5. before 7 July 1999,—
   1. 1 or more contracts had been entered into for the supply of goods or services in New Zealand in relation to the film; and
   2. at least $1,000,000 of expenditure had been incurred under the contract or contracts; and
6. on or before 1 November 1999, a person who entered into a contract referred to in paragraph (d)(i) gave notice to the Commissioner that the requirements of paragraphs (c) and (d) were met; and
7. the expenditure for which persons are allowed a deduction under section DS 1 (Acquiring film rights) or DS 2 (Film production expenditure) is no more than 140% of the physical cost of production of the film; and
8. without limiting the application of section BG 1 (Tax avoidance), on the date the film reimbursement scheme is entered into, there is an expectation based on reasonable commercial assumptions that the income to be derived by person A as a result of the expenditure will be at least equal to the sum of—
   1. all expenditure incurred by person A under the scheme; and
   2. a return on each amount of expenditure that is equivalent to the return on 5 year government stock measured on the date that the scheme is entered into; and
9. if the expenditure is incurred on depreciable intangible property of a kind listed in schedule 14 (Depreciable intangible property), the expenditure is an amount paid to person B in the circumstances described in subsection (2).

10. For the purposes of subsection (1)(h), the circumstances are that—

11. the amount paid is income of person B; or
12. at all times in the tax year in which the payment is made, person B—
    1. is resident in a country or territory specified in schedule 24, part A (International tax rules: grey list countries); and
    2. is liable to income tax in that country or territory by reason of domicile, residence, place of incorporation, or place of management in that country or territory; and
    3. has calculated its income that is liable to income tax in that country or territory without applying a feature of the taxation law of the country or territory specified in schedule 24, part B.

13. In this section,—

    government stock means stock issued under Part 6 of the Public Finance Act 1989

    physical cost of production means the expenditure incurred in producing a film, whether incurred in New Zealand or elsewhere, other than expenditure incurred—

    1. in marketing or selling the film; and
    2. on depreciable intangible property of a kind listed in schedule 14.

14. This section overrides the general permission.

Compare

• 2004 No 35 s DZ 11