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Income Tax Act 2007

Timing and quantifying rules - Depreciation

EE 19: Cost: fixed life intangible property

You could also call this:

“How to calculate costs for fixed life intangible property”

If you own something called fixed life intangible property, this part of the law explains how to handle extra costs for it. When you spend more money on this property in a year, but you can’t claim it as a tax deduction (except for depreciation), there’s a special way to work it out.

For some things like design registrations, design registration applications, or industrial artistic copyrights, this rule doesn’t apply to extra costs from before 7 November 2013.

When you’re figuring out the cost of the item at the start of the year (for a calculation in section EE 16), you need to add two things together. First, you take the adjusted tax value of the item at the start of the year. Then, you add the extra costs you’ve spent on it. This total is what you use as the item’s cost for that calculation.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514556.

Topics:
Money and consumer rights > Taxes
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EE 18B: Cost: some depreciable intangible property, or

“How to calculate the cost of certain intangible assets”

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EE 20: Application of sections EE 21 to EE 24, or

“Rules for calculating depreciation loss using the pool method”

Part E Timing and quantifying rules
Depreciation

EE 19Cost: fixed life intangible property

  1. This section applies when—

  2. a person owns an item of fixed life intangible property; and
    1. the person incurs additional costs in an income year for the item; and
      1. the person is denied a deduction for the additional costs other than a deduction for an amount of depreciation loss.

        1. This section does not apply for additional costs incurred before 7 November 2013 for—

        2. a design registration:
          1. a design registration application:
            1. industrial artistic copyright.

              1. For the purposes of the formula in section EE 16, the item’s cost at the start of the income year is treated as being the total of—

              2. the item’s adjusted tax value at the start of the income year; and
                1. the additional costs the person incurs.

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                  Notes
                  • Section EE 19(1B) heading: inserted (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 119(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                  • Section EE 19(1B): inserted (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 119(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                  • Section EE 19 list of defined terms design registration: inserted (with effect on 1 April 2015), on , by section 119(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                  • Section EE 19 list of defined terms design registration application: inserted (with effect on 1 April 2015), on , by section 119(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                  • Section EE 19 list of defined terms industrial artistic copyright: inserted (with effect on 1 April 2015), on , by section 119(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).