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Income Tax Act 2007

Timing and quantifying rules - Depreciation

EE 31: Annual rate for item acquired in person’s 1995–96 or later income year

You could also call this:

“Annual rates for calculating depreciation on items acquired since 1995”

You need to know about the annual rate for items of depreciable property that you acquire in the 1995-96 income year or later. Here’s what the law says:

The rate depends on when you acquired or decided to acquire the item:

If you acquired it on or before 20 May 2010, or decided to acquire it and met certain requirements by that date, the rate is:

  • The item’s economic rate, special rate, or provisional rate for most items
  • That rate multiplied by 1.2 for new items that aren’t buildings, used imported cars, or international aircraft
  • 15% diminishing value or 10% straight-line for international aircraft
  • 0% for buildings with an economic rate or provisional rate more than 0% due to an estimated useful life of 50 years or more

If you acquired it after 20 May 2010, or decided to acquire it after that date, the rate is:

  • The item’s economic rate, special rate, or provisional rate for most items
  • 15% diminishing value or 10% straight-line for international aircraft
  • 0% for buildings with an economic rate or provisional rate more than 0% due to an estimated useful life of 50 years or more

To use the pre-20 May 2010 rates, you need to have documents showing you decided to acquire the item by that date and send a declaration to the Commissioner.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1514607.

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Money and consumer rights > Taxes
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EE 30: Economic rate for plant, equipment, or building, with high residual value, or

“How to set depreciation rates for high-value plant, equipment, or buildings”

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EE 32: Election in relation to certain depreciable property acquired on or after 1 April 2005, or

“Choose how to calculate depreciation for certain items bought from April 2005 to early 2006”

Part E Timing and quantifying rules
Depreciation

EE 31Annual rate for item acquired in person’s 1995–96 or later income year

  1. This section is about the annual rate that applies to an item of depreciable property that a person acquires, other than under section FL 2(2) or FL 3(2) (which relate to the treatment of emigrating companies and their shareholders), in their 1995–96 income year or a later income year (not including fixed life intangible property or excluded depreciable property, for which rates are set in sections EE 33 and EZ 15 (Annual rate for excluded depreciable property: 1992–93 tax year)). Subsection (2) applies to specify the annual rate for the item if the requirements in subsection (2A) are met, and subsection (3) applies to specify the annual rate for the item if subsections (2A) and (2) do not apply and the requirements in subsection (3A) are met.

  2. This subsection applies, and the rate is 1 of the rates given by subsection (2), if the person—

  3. acquires the item on or before 20 May 2010; or
    1. decides to acquire or construct the item, meets the administrative requirements in subsection (4), and—
      1. enters into a binding contract for the acquisition or construction of the item on or before 20 May 2010:
        1. after deciding to acquire or construct the item, incurs expenditure in relation to its acquisition or construction on or before 20 May 2010.

        2. If subsection (2A) applies, the rate is 1 of the following:

        3. the item's economic rate, special rate, or provisional rate, for an item not described in paragraph (b), (c), or (d):
          1. the item's economic rate, special rate, or provisional rate, multiplied by 1.2, for an item that—
            1. has not been used or held for use in New Zealand as an item of depreciable property before the date on which the person acquires it; and
              1. is not a building; and
                1. is not a used imported car; and
                  1. is not an international aircraft:
                  2. a diminishing value rate of 15% or a straight-line rate of 10%, for an international aircraft:
                    1. 0% for a building that has an economic rate or provisional rate of more than 0% due to an estimated useful life of 50 years or more.

                      1. This subsection applies, and the rate is 1 of the rates given by subsection (3), if subsections (2A) and (2) do not apply and the person—

                      2. acquires the item after 20 May 2010; or
                        1. decides to acquire or construct the item, and—
                          1. enters into a binding contract for the acquisition or construction of the item after 20 May 2010:
                            1. incurs expenditure in relation to the item's acquisition or construction after 20 May 2010.

                            2. If subsection (3A) applies, the rate is 1 of the following:

                            3. the item's economic rate, special rate, or provisional rate, for an item not described in paragraph (b) or (c):
                              1. a diminishing value rate of 15% or a straight-line rate of 10% for an international aircraft:
                                1. 0%, for a building that has an economic rate or provisional rate of more than 0% due to an estimated useful life of 50 years or more.

                                  1. For the purposes of subsection (2A)(b), a person must—

                                  2. have available for the Commissioner documents dated on or before 20 May 2010 that evidence that the person had, on or before 20 May 2010, decided to acquire or construct the relevant item:
                                    1. send to the Commissioner a statutory declaration that the person had, on or before 20 May 2010, decided to acquire or construct the relevant item.

                                      Compare
                                      Notes
                                      • Section EE 31(1): amended (with effect on 30 August 2022), on , by section 52 of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).
                                      • Section EE 31(1): amended (with effect on 20 May 2010), on , by section 49(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31(1): amended (with effect on 20 May 2010), on , by section 77(1) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(2A) heading: inserted (with effect on 20 May 2010), on , by section 49(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31(2A): inserted (with effect on 20 May 2010), on , by section 49(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31(2A)(b): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                                      • Section EE 31(2A)(b)(i): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                                      • Section EE 31(2A)(b)(ii): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                                      • Section EE 31(2) heading: substituted (with effect on 20 May 2010), on , by section 77(2)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(2): amended (with effect on 20 May 2010), on , by section 49(3) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31(2): amended (with effect on 20 May 2010), on , by section 77(2)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(2)(a): amended, on (applying for the 2011–12 and later income years), by section 77(4)(a) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(2)(a): substituted (with effect on 1 April 2008), on , by section 119(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                      • Section EE 31(2)(b): amended (with effect on 1 April 2008), on , by section 119(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                                      • Section EE 31(2)(c): amended, on (applying for the 2011–12 and later income years), by section 77(4)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(2)(d): added, on (applying for the 2011–12 and later income years), by section 77(4)(b) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(2)(d): amended, on , by section 55(1) (and see section 55(4) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                                      • Section EE 31(3A) heading: inserted (with effect on 20 May 2010), on , by section 49(4) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31(3A): inserted (with effect on 20 May 2010), on , by section 49(4) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31(3A)(b): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                                      • Section EE 31(3A)(b)(i): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                                      • Section EE 31(3A)(b)(ii): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                                      • Section EE 31(3) heading: added (with effect on 20 May 2010), on , by section 77(3) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(3): amended (with effect on 20 May 2010), on , by section 49(5) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31(3): added (with effect on 20 May 2010), on , by section 77(3) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(3)(a): amended, on (applying for the 2011–12 and later income years), by section 77(4)(c) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(3)(b): amended, on (applying for the 2011–12 and later income years), by section 77(4)(d) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(3)(c): added, on (applying for the 2011–12 and later income years), by section 77(4)(d) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31(3)(c): amended, on , by section 55(2) (and see section 55(4) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                                      • Section EE 31(4) heading: added (with effect on 20 May 2010), on , by section 49(6) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31(4): added (with effect on 20 May 2010), on , by section 49(6) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31(4)(a): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                                      • Section EE 31(4)(b): amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on , by section 242(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
                                      • Section EE 31 list of defined terms building: inserted, on , by section 55(3) (and see section 55(4) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                                      • Section EE 31 list of defined terms building: repealed, on , by section 5(3)(a) (and see section 5(4) for application) of the COVID-19 Response (Taxation and Social Assistance Urgent Measures) Act 2020 (2020 No 8).
                                      • Section EE 31 list of defined terms Commissioner: inserted (with effect on 20 May 2010), on , by section 49(7) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                                      • Section EE 31 list of defined terms estimated useful life: inserted, on (applying for the 2011–12 and later income years), by section 77(5) of the Taxation (Budget Measures) Act 2010 (2010 No 27).
                                      • Section EE 31 list of defined terms residential building: repealed, on , by section 55(3) (and see section 55(4) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).