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Income Tax Act 2007

Recharacterisation of certain transactions - Tax relief for emergencies - Interruption expenditure

FP 13: Treatment of expenditure when income-earning activity interrupted

You could also call this:

“What happens to your business costs when something stops you from working”

If you have a business or job in New Zealand and something unexpected happens, like a natural disaster, it can stop you from working. You might still have to pay some costs even though you are not working. These costs are called interruption expenditure. If you would normally be able to claim these costs as a deduction, but cannot because of the interruption, you can claim them under section DB 70. You can claim these costs when you start working again.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1432196.

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Part F Recharacterisation of certain transactions
Tax relief for emergencies: Interruption expenditure

FP 13Treatment of expenditure when income-earning activity interrupted

  1. This section applies for a person and the current year when—

  2. the person has an income-earning activity in New Zealand immediately before an emergency event; and
    1. the activity is interrupted for a period (the period of interruption) as a result of the emergency event; and
      1. in the current year, during the period of interruption, the person incurs expenditure or loss (the interruption expenditure) in meeting an obligation relating to the income-earning activity; and
        1. the interruption expenditure does not meet the requirements of the general permission for the person and the income-earning activity, but would do so but for the interruption; and
          1. the person resumes the income-earning activity in the emergency event period.

            1. The person is allowed a deduction for the interruption expenditure under section DB 70 (Deduction for interruption expenditure due to emergency event).

            2. The deduction is allocated to the income year in which the person resumes the income-earning activity.

            Notes
            • Section FP 13: inserted, on , by section 65 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).