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Income Tax Act 2007

Timing and quantifying rules - Depreciation

EE 18B: Cost: some depreciable intangible property

You could also call this:

“How to calculate the cost of certain intangible assets”

When you’re figuring out the cost of certain types of intangible property that can lose value over time, or when you’re applying for plant variety rights, you need to include some extra costs. These extra costs are for things that help create or support the main item you’re dealing with.

You can include these extra costs if you spent the money on or after 7 November 2013, and if the main item is one of these: a patent (or an application for one) that was fully described on or after 1 April 2005, plant variety rights, an application for plant variety rights, a registered design, an application to register a design, or an industrial artistic copyright.

There’s one more important point: you can only include these extra costs if you’re not allowed to deduct them somewhere else in the tax rules.

This rule is part of section EE 16 and helps you work out the true cost of these special types of property when you’re doing your taxes.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6763702.

Topics:

Money and consumer rights > Taxes

EE 18: Cost: change from diminishing value to straight-line method, or

“How to adjust cost when switching depreciation methods”

EE 19: Cost: fixed life intangible property, or

“How to calculate costs for fixed life intangible property”

Part E Timing and quantifying rules
Depreciation

EE 18BCost: some depreciable intangible property

For the purposes of section EE 16 and this subpart, the cost to a person for an item of depreciable intangible property or a plant variety rights application (the amortising item) includes an amount of expenditure incurred by the person for an item of intangible property (the underlying item) if—
the underlying item gives rise to, supports, or is an item in which the person holds, the amortising item; and
the amount of expenditure is incurred by the person on or after 7 November 2013, if the amortising item is 1 of—
1. a patent or a patent application with a complete specification lodged on or after 1 April 2005:
2. plant variety rights:
3. a plant variety rights application:
4. a design registration:
5. a design registration application:
6. industrial artistic copyright; and
the person is denied a deduction for the expenditure under a provision outside this subpart.

Notes

Section EE 18B: inserted (with effect on 1 April 2011 and applying for the 2011–12 and later income years), on 24 February 2016, by section 117(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
Section EE 18B: amended (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on 24 February 2016, by section 118(1) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
Section EE 18B(b): replaced (with effect on 1 April 2015 and applying for the 2015–16 and later income years), on 24 February 2016, by section 118(2) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
Section EE 18B list of defined terms design registration: inserted (with effect on 1 April 2015), on 24 February 2016, by section 118(3) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
Section EE 18B list of defined terms design registration application: inserted (with effect on 1 April 2015), on 24 February 2016, by section 118(3) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).
Section EE 18B list of defined terms industrial artistic copyright: inserted (with effect on 1 April 2015), on 24 February 2016, by section 118(3) of the Taxation (Annual Rates for 2015–16, Research and Development, and Remedial Matters) Act 2016 (2016 No 1).