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Income Tax Act 2007

Avoidance and non-market transactions - Avoidance: specific

GB 17: Excessive amounts for film rights or production expenditure

You could also call this:

“Limiting excessive tax claims for film-related expenses”

This law is about making sure people don’t claim too much money for film-related expenses. It applies when you’re allowed to deduct money from your taxes for buying film rights or for film production costs.

If you (the buyer) get these things from someone else (the seller), and the government thinks you two are connected in some way, they’ll look closely at how much you paid. If you paid more than what these things are really worth, you won’t be able to claim all of it on your taxes.

The government will only let you claim the actual market value of the film rights or production services, not the higher amount you paid. This helps prevent people from inflating costs to get bigger tax deductions.

If you only bought part of the film rights, this rule still applies, but only to the part you bought.

Remember, if you’re unsure about how this applies to you, it’s a good idea to ask a grown-up or a tax expert for help.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516940.

Topics:
Money and consumer rights > Taxes
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GB 18: Arrangements to acquire film rights or incur production expenditure, or

“Rules for film-related tax arrangements to prevent unfair deductions”

Part G Avoidance and non-market transactions
Avoidance: specific

GB 17Excessive amounts for film rights or production expenditure

  1. This section applies when—

  2. a person (the buyer) is allowed a deduction under—
    1. section DS 1 (Acquiring film rights) for expenditure incurred in acquiring a film right; or
      1. section DS 2 (Film production expenditure) for expenditure incurred in acquiring goods or services in relation to a film; and
      2. the Commissioner considers that the buyer and the person from whom the film right, goods, or services were acquired (the seller) were not dealing with each other at arm’s length; and
        1. the amount of expenditure incurred by the buyer is more than the market value of the film right, goods, or services at the time they were acquired.

          1. The deduction is reduced to an amount equal to the market value.

          2. If the buyer acquires only a share in a film right, this section applies only to the part of the total market value of the film right that is attributable to that share.

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          Notes
          • Section GB 17(1)(b): amended (with effect on 1 April 2008), on (applying for the 2008–09 and later income years), by section 140(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).