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Income Tax Act 2007

Timing and quantifying rules - Spreading of specific income

EI 3: Assigning or granting copyright

You could also call this:

“Spreading income from selling or licensing copyright for creative works”

This section applies to you if you create a literary, dramatic, musical, or artistic work over more than a year and receive money for selling or licensing the copyright. If you get a lump sum payment that would count as income in one tax year, you can spread it out. You can split it equally between the year you get it and the year before (if you made the work in two years or less), or the two years before (if you made it in more than two years).

If you get money that’s not a lump sum, would be income in one tax year, and you receive it within two years of first publishing your work, you can split it equally between the year you get it and the year before. This also applies if you’re the publisher of your own work.

To spread out your income, you need to ask the Commissioner. For lump sum payments, you have up to 6 years after the end of the income year when you got the money to ask. For other payments, you have up to 8 years after your work was first published.

In this section, ‘author’ includes people who created the work together. ‘First publication’ means the first time your work is published, performed, or shown. ‘Lump sum payment’ includes money you get in advance for royalties.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515062.

Topics:
Money and consumer rights > Taxes
Arts and culture > Arts funding
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Part E Timing and quantifying rules
Spreading of specific income

EI 3Assigning or granting copyright

  1. This section applies when a person—

  2. is the author of a literary, dramatic, musical, or artistic work; and
    1. made the work over a period of more than 1 year; and
      1. receives consideration from—
        1. assigning some or all of the copyright in the work; or
          1. granting an interest in the copyright by licence.

          2. If some or all of the consideration is a lump sum payment that would be income in 1 tax year, the person may allocate the income equally between the income year in which they receive it and—

          3. the income year before that income year, if they made the work over a period of 2 years or less; or
            1. the 2 income years before that income year, if they made the work over a period of more than 2 years.

              1. If some or all of the consideration is not a lump sum payment, would be income in 1 tax year, and is received by the person within 2 years after the first publication of the work, the person may allocate the income equally between the income year in which they receive it and the previous income year.

              2. Subsection (3) applies to income that the person derives from being the publisher of their work.

              3. The following provisions apply to an allocation for the purposes of subsections (2) and (3):

              4. for an allocation under subsection (2), the person must apply to the Commissioner no later than 6 years after the end of the income year in which they receive the payment; and
                1. for an allocation under subsection (3), the person must apply to the Commissioner no later than 8 years after the first publication of the work.

                  1. In this section,—

                    author includes a joint author

                      first publication means the first occasion on which the work or a reproduction of it is published, performed, or exhibited

                        lump sum payment includes an advance on account of royalties.

                        Compare
                        Notes
                        • Section EI 3(5)(a): amended, on , by section 27(1) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                        • Section EI 3(5)(b): amended, on , by section 27(2) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                        • Section EI 3 list of defined terms apply: inserted, on , by section 27(3) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).