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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:

“No tax refund for some overseas investments”

When you are a foreign PIE equivalent, this rule applies if you spend money or have a loss to get an amount that is covered by section CX 55B. You cannot claim a deduction for the amount you spent or lost. This rule is more important than the general rule that allows deductions.

You have to follow this rule even if the general rule says you can claim a deduction. This means you will not get any tax benefit from the money you spent or the loss you had. The rule is about how foreign PIE equivalents are treated for tax purposes.

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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.

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

"Special tax rules for certain investments in foreign investment PIEs"

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Part D Deductions
Specific rules for expenditure types

DB 54CCertain expenditure incurred by foreign PIE equivalents

  1. 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.

  2. The foreign PIE equivalent is denied a deduction for the amount of the expenditure or loss.

  3. This section overrides the general permission.

Notes
  • Section DB 54C: inserted, on (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).