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Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 54C: Certain expenditure incurred by foreign PIE equivalents

You could also call this:

“Foreign investment entities can't deduct expenses from certain income”

When you are a foreign PIE equivalent (a type of overseas investment entity), you might earn money from selling certain shares or financial arrangements. This money is covered by section CX 55B. If you spend money or have a loss while earning this income, you can’t claim it as a deduction from your taxes. This rule applies even if you would normally be allowed to claim such deductions. The law says you can’t deduct any of the costs or losses related to earning this specific type of income.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS32733.

Topics:

Money and consumer rights > Taxes

DB 54B: Expenditure incurred by foreign investment PIEs, or

“Special tax rules for certain investments in foreign investment PIEs”

DB 55: Expenditure incurred in deriving exempt dividend, or

“ Spending to get tax-free dividends: this rule no longer applies ”

Part D Deductions
Specific rules for expenditure types

DB 54CCertain expenditure incurred by foreign PIE equivalents

This section applies for an income year when a foreign PIE equivalent incurs expenditure or loss in deriving an amount to which section CX 55B (Proceeds from disposal of certain shares and financial arrangements) applies.
The foreign PIE equivalent is denied a deduction for the amount of the expenditure or loss.
This section overrides the general permission.

Notes

Section DB 54C: inserted, on 29 March 2018 (with effect on 1 April 2012 and applying for the 2012–13 and later income years), by section 48(1) of the Taxation (Annual Rates for 2017–18, Employment and Investment Income, and Remedial Matters) Act 2018 (2018 No 5).