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Income Tax Act 2007

Avoidance and non-market transactions - Avoidance: specific

GB 18: Arrangements to acquire film rights or incur production expenditure

You could also call this:

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

If you and someone else make arrangements about film rights or production costs, the Commissioner might think you’re trying to get better tax treatment than you should. This applies to several areas of film-related expenses.

If the Commissioner believes this has happened, they can change how your deductions work. They might reduce the amount you can claim for acquiring film rights or for film production costs. They’ll only let you claim what they think you should have been able to claim without the special arrangements.

The Commissioner can also change when you’re allowed to claim these deductions. They might move the deduction to a different tax year - the year they think it should have been claimed in if you hadn’t made the special arrangements.

This rule applies to several specific parts of the tax law. These parts deal with things like buying film rights, spending money on film production, and how these costs are spread out over time. It covers both New Zealand films and films from other countries.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1516944.

Topics:
Money and consumer rights > Taxes
Business > Industry rules
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GB 17: Excessive amounts for film rights or production expenditure, or

“Limiting excessive tax claims for film-related expenses”

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GB 19: When film production expenditure payments delayed or contingent, or

“Rules for delayed or uncertain payments in film production”

Part G Avoidance and non-market transactions
Avoidance: specific

GB 18Arrangements to acquire film rights or incur production expenditure

  1. This section applies if the Commissioner considers that 2 persons have made arrangements so that any of the following sections applies more favourably in relation to a person in an income year than would have applied without the arrangements:

  2. section DS 1 (Acquiring film rights):
    1. section DS 2 (Film production expenditure):
      1. section EJ 4 (Expenditure incurred in acquiring film rights in feature films):
        1. section EJ 5 (Expenditure incurred in acquiring film rights in films other than feature films):
          1. section EJ 7 (Film production expenditure for New Zealand films):
            1. section EJ 8 (Film production expenditure for films other than New Zealand films).

              1. The deduction allowed to the person under section DS 1 or DS 2 is reduced to the amount that the Commissioner considers would have been allowed had the arrangements not occurred.

              2. The deduction allocated under section EJ 4, EJ 5, EJ 7, or EJ 8 is allocated to the income year to which the Commissioner considers it would have been allocated had the arrangements not occurred.

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