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Income Tax Act 2007

Timing and quantifying rules - Spreading of specific expenditure

EJ 8: Film production expenditure for other films having no large budget film grant

You could also call this:

“Tax deductions for film production without large budget grants”

When you make a film without getting a large budget film grant, you can claim some money back through a tax deduction. This applies to films that don’t have a final certificate under section EJ 6.

If you own the rights to the film at the end of the tax year when it’s finished, you can split the deduction. You can claim either half of it or the amount of money you made from the film (whichever is less) in that year. The rest of the deduction goes to the next tax year.

For any money you spend on the film after it’s done, you can claim that back in the same year you spend it.

If you sell the film rights in the same year the film is completed and don’t own any rights at the end of that year, you can claim all the remaining deduction in that year.

The ‘remaining deduction’ means any part of the deduction you haven’t claimed in earlier years.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515112.

Topics:
Money and consumer rights > Taxes
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EJ 7: Film production expenditure for New Zealand films having no large budget film grant, or

“Rules for claiming expenses on qualifying New Zealand films without large budget grants”

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EJ 9: Avoidance arrangements, or

“Rules to prevent misuse of tax deductions for film and petroleum expenses”

Part E Timing and quantifying rules
Spreading of specific expenditure

EJ 8Film production expenditure for other films having no large budget film grant

  1. A deduction under section DS 2 (Film production expenditure) for film production expenditure is allocated under this section if—

  2. the film is not one for which a large budget film grant is made; and
    1. the film does not have a final certificate under section EJ 6.

      1. If the person has a film right at the end of the income year in which the film is completed, the deduction for film production expenditure incurred in or before the income year is allocated as follows:

      2. to the income year in which the film is completed,—
        1. 50% of the deduction; or
          1. if the film income derived in the income year is more than 50% of the deduction, the lesser of the amount of film income and the total amount of the deduction; and
          2. to the next income year, the remaining deduction.

            1. If the person has a film right in an income year after the film is completed, a deduction for film production expenditure incurred after the film is completed is allocated to the income year in which it is incurred.

            2. If the person disposes of a film right in the income year in which the film is completed, and does not have a film right in the film at the end of the income year, the remaining deduction is allocated to the income year.

            3. In this section, remaining deduction means, for an income year, the amount of the deduction for film production expenditure that has not been allocated to an earlier income year.

            Compare
            Notes
            • Section EJ 8 heading: substituted, on , by section 363(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
            • Section EJ 8 heading: amended (with effect on 1 January 2010), on , by section 35(1) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
            • Section EJ 8 heading: amended, on , by section 126(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
            • Section EJ 8(1): substituted, on , by section 363(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109).
            • Section EJ 8(1)(a): substituted, on , by section 126(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
            • Section EJ 8(1)(a): amended (with effect on 1 January 2010), on , by section 35(2) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
            • Section EJ 8 list of defined terms government screen production payment: repealed (with effect on 1 January 2010), on , by section 35(3)(a) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).
            • Section EJ 8 list of defined terms large budget film grant: inserted (with effect on 1 January 2010), on , by section 35(3)(b) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109).