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Income Tax Act 2007

Timing and quantifying rules - Valuation of livestock - Definitions

EC 33: Determining depreciation percentages

You could also call this:

“How the tax office calculates yearly value loss for expensive farm animals”

The Commissioner has to decide how much expensive farm animals lose value each year. This is called a depreciation percentage. It’s different for each type of animal.

The percentage shows how much the animals’ value goes down on average. When the Commissioner chooses this percentage, they think about three things:

  1. How much the animals usually cost to buy
  2. How long the animals are expected to live and be useful
  3. How much money farmers might get if they sell the animals at the end of their useful life

The Commissioner’s decision about the depreciation percentage is a type of law. It needs to be published according to the rules in Part 3 of the Legislation Act 2019.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514433.

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EC 32: Application of sections EC 33 to EC 37, or

“Rules for valuing expensive farm animals”

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EC 34: General rule, or

“How to calculate the value of expensive livestock for tax purposes”

Part E Timing and quantifying rules
Valuation of livestock: Definitions

EC 33Determining depreciation percentages

  1. The Commissioner must determine a depreciation percentage for an income year for each type, class, or category of high-priced livestock.

  2. The percentage represents the average percentage decline in the value of livestock of the type, class, or category.

  3. The Commissioner must take into account—

  4. the average cost of livestock of the type, class, or category; and
    1. the estimated useful life of the livestock; and
      1. the average estimated residual market value of the livestock.

        1. A determination under subsection (1) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

        Compare
        Notes
        • Section EC 33(4) heading: inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
        • Section EC 33(4): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).