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Income Tax Act 2007

Income - Exempt income

CW 55BC: Water organisations

You could also call this:

"Income from water organisations may not be taxed if they follow certain rules"

Illustration for Income Tax Act 2007

If you get income from a water organisation, it might not be taxed. This happens if the organisation only provides water services or services related to water. The organisation must also meet certain rules, such as being a company with specific shareholders, like a territorial authority, or making distributions to people who do not pay tax on their income. You can find out what a water organisation is by looking at the Local Government (Water Services) Act 2025. This act also explains what water services are. A territorial authority is explained in the Local Government Act 2002. The rules also mention a consumer trust, which is explained in the Local Government (Water Services) Act 2025. The Companies Act 1993 is important for companies that provide water services. Some income is exempt, which means it is not taxed, as explained in sections CW 41 and CW 42.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1507011.

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Part CIncome
Exempt income

CW 55BCWater organisations

  1. An amount of income derived by a water organisation is exempt income if—

  2. the water organisation provides services that are only 1 or more of the following:
    1. water services:
      1. services that are related to, or necessary for, providing water services (for example, services relating to the management or maintenance of water services networks):
      2. the water organisation is a company incorporated under the Companies Act 1993, and the only shareholders of the company are 1 or more of the following:
        1. a territorial authority:
          1. a consumer trust that derives only exempt income under 1 or both of sections CW 41 and CW 42:
          2. the water organisation is not a company incorporated under the Companies Act 1993, and any distribution it makes is to a person who derives only exempt income.

            1. In this section and section CW 39, water organisation has the same meaning as in section 4 of the Local Government (Water Services) Act 2025.

            2. In this section, water services has the same meaning as in section 4 of the Local Government (Water Services) Act 2025.

            3. In this section, territorial authority has the same meaning as in section 5(1) of the Local Government Act 2002.

            4. In this section, consumer trust has the same meaning as in section 4 of the Local Government (Water Services) Act 2025.

            Notes
            • Section CW 55BC: inserted, on , by section 36(1) (and see section 36(2) for application) of the Local Government (Water Services) (Repeals and Amendments) Act 2025 (2025 No 43).