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Income Tax Act 2007

Timing and quantifying rules - Spreading of specific expenditure - Definitions

EJ 25: Allocation of expenditure on aircraft engine overhauls: election by IFRS user

You could also call this:

“Choosing how to claim deductions for aircraft engine overhauls under IFRS rules”

You can choose to decide how much of a deduction you’re allowed for aircraft engine overhauls if you meet certain conditions. To do this, you need to be a New Zealand resident or have a valid aircraft registration from the Director of Civil Aviation. You also need to use IFRS rules for your financial statements, and the aircraft must be owned by you or leased under a finance lease according to IFRS rules.

If you choose this option, you’ll need to work out your deductions using the figures from your financial statements. You’ll also need to use methods and adjustments that you’ve agreed on with the Commissioner.

This choice applies to all your assessments after you’ve made the necessary agreements with the Commissioner and told them about your choice. It continues until you no longer meet the conditions, you tell the Commissioner you’re stopping, or the Commissioner tells you they won’t accept assessments based on this approach anymore.

The Commissioner might not accept your assessments if they think you’ve strayed too far from your agreement or the IFRS rules. They can let you know about this by sending you a notice.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7281504.

Topics:
Money and consumer rights > Taxes
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EJ 24: Allocation of expenditure on aircraft engine overhauls, or

“How to spread out deductions for aircraft engine costs over time”

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EJ 26: Allocation of expenditure on aircraft engine overhauls: election by operator of single aircraft, or

“How to allocate costs for aircraft engine overhauls if you operate only one aircraft”

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

EJ 25Allocation of expenditure on aircraft engine overhauls: election by IFRS user

  1. A person may elect to quantify and allocate under this section the amount of a deduction allowed by section DW 5 or DW 6 (which relate to the acquisition, overhaul, and leasing of aircraft engines) in relation to an aircraft or aircraft engine and an income year if—

  2. the person is a New Zealand resident or holds a valid certificate of registration for the aircraft from the Director of Civil Aviation under the Civil Aviation Act 1990; and
    1. the person uses IFRS rules to prepare financial statements; and
      1. the aircraft is treated under the IFRS rules as being owned by the person or is leased by the person under a finance lease.

        1. A person who elects to rely on this subsection must quantify and allocate deductions under section DW 5 or DW 6 for an assessment to which the election applies by using the figures relating to aircraft and aircraft engines used in the person’s financial statements and using methods and adjustments agreed with the Commissioner.

        2. An election under this section applies for each assessment that is made by the person—

        3. after the person—
          1. reaches any necessary agreement under subsection (2) with the Commissioner; and
            1. notifies the Commissioner of the election when or before making a return based on the elected approach; and
              1. is notified that the Commissioner accepts the election, if the Commissioner has previously notified the person under paragraph (d); and
              2. before the person’s return for an income year for which the person does not meet the requirements of subsection (1); and
                1. before the person notifies the Commissioner, when or before making a return based on an approach other than the elected approach, that the election is revoked; and
                  1. before the person is notified that the Commissioner will not accept assessments based on the elected approach.

                    1. The Commissioner may give to the person a notice referred to in subsection (3)(d), or may refuse to give to the person a notice referred to in subsection (3)(a)(iii), if the Commissioner considers that the person has, in making an assessment, departed significantly from an agreement with the Commissioner or from the requirements of the IFRS rules.

                    Notes
                    • Section EJ 25: inserted, on (applying for the 2017–18 and later income years), by section 69(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).