Plain language law

New Zealand law explained for everyone

Income Tax Act 2007

Timing and quantifying rules - Spreading of specific expenditure - Definitions

EJ 20C: Length of spreading period

You could also call this:

“How long mining costs are spread for tax purposes”

This section explains how to figure out the length of time over which certain mining costs are spread for tax purposes. It applies to mineral miners who have a mining permit area.

The spreading period is based on how long the mine is expected to last. This expected life of the mine is defined in another part of the law.

The spreading period starts on whichever of these two dates comes later:

  1. The first day of the tax year when you start making money from producing industrial minerals in your mining area, or
  2. The first day of the tax year when you spend the money on mining.

The spreading period ends on the last day of the tax year when the mine is expected to finish operating.

This spreading period is used to work out how to spread the costs of mining over several years for tax purposes.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6036012.

Topics:
Money and consumer rights > Taxes
Previous

EJ 20B: Certain mining expenditure spread over assumed life of mine, or

“Spreading mining costs over a mine's expected lifespan”

Next

EJ 20D: Measurement of assumed life of mine and application to rate, or

“How to calculate tax deductions for mineral miners based on estimated mine life”

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

EJ 20CLength of spreading period

  1. This section applies for the purposes of section EJ 20B(3) to determine the length of the spreading period for certain mining expenditure of a mineral miner related to a mining permit area.

  2. The spreading period is the number of income years that represents the assumed life of the mine referred to in section EJ 20D that comprises the mining permit area,—

  3. starting from the later of—
    1. the first day of the income year in which the mineral miner's commercial production of a listed industrial mineral from the mining permit area starts; or
      1. the first day of the income year in which the expenditure is incurred; and
      2. ending on the last day of the income year in which the expiry of the assumed life of the mine occurs.

        Notes
        • Section EJ 20C: inserted, on (applying for the 2014–15 and later income years), by section 50 of the Taxation (Annual Rates, Foreign Superannuation, and Remedial Matters) Act 2014 (2014 No 4).