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Income Tax Act 2007

Timing and quantifying rules - Terminating provisions - Entry to new life insurance regime: transitional and miscellaneous provisions

EZ 65: Expenditure or loss incurred, and amounts derived

You could also call this:

“How KiwiRail and New Zealand Railways Corporation are treated for tax purposes”

You should know that KiwiRail Holdings Limited and New Zealand Railways Corporation are treated as the same company for some tax purposes. This applies to the time before and including 31 December 2012.

This means that when figuring out certain things about KiwiRail’s money, the government will look at both companies as if they were one. These things include:

  1. If KiwiRail can get a tax deduction for money it spent or lost on railway stuff.
  2. How much of a tax deduction KiwiRail can get for railway-related expenses.
  3. If money KiwiRail made from railway stuff counts as income.
  4. How much of KiwiRail’s railway-related income is taxable.

Even though New Zealand Railways Corporation is usually treated differently for tax purposes because it’s run by the government, in this case, it’s treated like a regular company.

This rule helps make sure that KiwiRail’s taxes are fair and consistent, even though the railway business changed hands.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM5505263.

Topics:
Money and consumer rights > Taxes
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EZ 64: New Zealand Railways Corporation restructure: purpose and initial amounts for tax purposes, or

“Setting tax rules for New Zealand Railways Corporation's change to a state enterprise”

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EZ 66: Prepayments, or

“How KiwiRail can claim deductions for prepaid expenses”

Part E Timing and quantifying rules
Terminating provisions: Entry to new life insurance regime: transitional and miscellaneous provisions

EZ 65Expenditure or loss incurred, and amounts derived

  1. KiwiRail Holdings Limited and New Zealand Railways Corporation are treated as the same person for the period prior to and including 31 December 2012 for the purpose of determining the following:

  2. whether a deduction is allowed for an amount of expenditure or loss incurred by KiwiRail Holdings Limited in connection with the Railways assets or liabilities:
    1. the amount of any deduction of KiwiRail Holdings Limited in connection with the Railways assets or liabilities:
      1. whether an amount derived by KiwiRail Holdings Limited in connection with the Railways assets or liabilities is income:
        1. the amount of any income of KiwiRail Holdings Limited in connection with the Railways assets or liabilities.

          1. For the purposes of subsection (1), New Zealand Railways Corporation is treated as if it was a company that was not a public authority.

          Notes
          • Section EZ 65: inserted (with effect on 31 December 2012), on , by section 54 of the Taxation (Livestock Valuation, Assets Expenditure, and Remedial Matters) Act 2013 (2013 No 52).