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Income Tax Act 2007

Timing and quantifying rules - Spreading of specific expenditure - Definitions

EJ 22: Deductions for market development: product of research, development

You could also call this:

“Spreading out deductions for marketing costs of research products before business use”

You can choose to spread out a deduction for money you spend on market development for a product that came from your research or development. This applies to money you spend before you start making or using the product for business. It’s not for interest payments.

If you want, you can move some or all of this deduction to a later tax year. You do this using [section DB 34(7)]. There are rules about how to do this in [section EJ 23].

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515153.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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EJ 21: Contributions to employees’ superannuation schemes, or

“Tax deductions for employer contributions to employees' superannuation schemes”

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EJ 23: Allocation of deductions for research, development, and resulting market development, or

“How to spread out tax deductions for research and development expenses”

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

EJ 22Deductions for market development: product of research, development

  1. This section applies when a person is allowed a deduction for expenditure that is not interest and is incurred—

  2. on market development for a product that has resulted from expenditure incurred by the person on research or development; and
    1. before the person begins commercial production or commercial use of the product.

      1. The person may choose to allocate under section DB 34(7) all or part of the deduction to an income year—

      2. after the income year in which the person incurs the expenditure; and
        1. in the way required by section EJ 23.

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          Notes
          • Section EJ 22(1): amended, on (with effect on 1 April 2008 and applying for the 2008–09 and later income years), by section 76(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).