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Income Tax Act 2007

Timing and quantifying rules - Environmental restoration accounts

EK 2: Persons who may make payment to environmental restoration account

You could also call this:

“Who can save money for future environmental repairs”

You can put money into an environmental restoration account if you meet certain conditions. You need to run a business in New Zealand. You also need to think you’ll spend money in the future on things that help the environment. This future spending must not be on property that makes money, except for some types of land. The spending needs to be on things that stop, fix, or lessen the bad effects of pollution or noise. There’s a list of what kinds of spending are allowed and what kinds aren’t.

You also need to show that you’re planning for this future spending in your financial reports. These reports must be for people outside your business to see. An accountant with special qualifications needs to check these reports. The accountant must say the reports are okay without any problems related to this part of the tax law.

If you do all these things, you can put money into an environmental restoration account for that year.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515162.

Topics:
Environment and resources > Conservation
Business > Industry rules
Money and consumer rights > Taxes
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EK 1: Payment to Crown Bank Account, or

“Paying tax money to the government's bank account”

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EK 3: Payments to environmental restoration account, or

“Rules for paying into an environmental restoration account”

Part E Timing and quantifying rules
Environmental restoration accounts

EK 2Persons who may make payment to environmental restoration account

  1. A person may make a payment to the Commissioner for entry in the person’s environmental restoration account for an income year if the person—

  2. carries on a business in New Zealand; and
    1. expects to incur, for a later income year, expenditure that—
      1. is not on revenue account property, other than land to which section CB 8 (Disposal: land used for landfill, if notice of election) applies; and
        1. is of a kind listed in schedule 19, part B (Expenditure in avoiding, remedying, or mitigating detrimental effects of discharge of contaminant or making of noise); and
          1. is of a kind not listed in schedule 19, part C; and
          2. makes a provision for such expenditure in financial statements that are—
            1. prepared for external reporting purposes; and
              1. audited by an accountant who is a chartered accountant or has equivalent professional qualifications; and
                1. given by the accountant a standard audit opinion, without qualifications on matters relating to the effect of this subpart.

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                Notes
                • Section EK 2(b)(ii): amended (with effect on 1 April 2018), on , by section 170 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).