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Income Tax Act 2007

Timing and quantifying rules - Spreading of specific expenditure - Definitions

EJ 20: Meaning of petroleum mining development

You could also call this:

“What counts as petroleum mining development for tax purposes”

In sections EJ 12 and EJ 12B, ‘petroleum mining development’ means a place where certain activities happen. These activities are related to getting petroleum out of the ground and preparing it for use.

The activities include developing an area where you have permission to produce petroleum, actually producing the petroleum, and getting it ready to be sent to someone who will buy it, use it, or process it further. It also includes shutting down the operation when you’re finished.

However, some things are not included in ‘petroleum mining development’. These are extra steps that happen after the petroleum has been separated into different parts like crude oil, condensate, or natural gas. These extra steps might involve making the petroleum into a liquid or compressing it, taking out specific parts of it, or making new products from it. But if these things happen at the same place where the petroleum is produced, they are still part of ‘petroleum mining development’.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515146.

Topics:
Money and consumer rights > Taxes
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EJ 20B: Certain mining expenditure spread over assumed life of mine, or

“Spreading mining costs over a mine's expected lifespan”

Part E Timing and quantifying rules
Spreading of specific expenditure: Definitions

EJ 20Meaning of petroleum mining development

  1. In sections EJ 12 and EJ 12B, petroleum mining development means a place where 1 or more of the activities described in subsection (2) is carried out.

  2. The activities are those carried out in connection with—

  3. developing a permit area for producing petroleum:
    1. producing petroleum:
      1. processing, storing, or transmitting petroleum before its dispatch to a buyer, consumer, processor, refinery, or user:
        1. decommissioning.

          1. The activities do not include further treatment to which all the following apply:

          2. it occurs after the well stream has been separated and stabilised into crude oil, condensate, or natural gas; and
            1. it is done—
              1. by liquefaction or compression; or
                1. for the extraction of constituent products; or
                  1. for the production of derivative products; and
                  2. it is not treatment at the production facilities.

                    Notes
                    • Section EJ 20: substituted (with effect on 1 April 2008), on , by section 131(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
                    • Section EJ 20(2)(d): amended, on , by section 75(1) (and see section 75(3) for application) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                    • Section EJ 20 list of defined terms decommissioning: inserted, on , by section 75(2)(a) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).
                    • Section EJ 20 list of defined terms removal or restoration operations: repealed, on , by section 75(2)(b) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).