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Income Tax Act 2007

Income - Terminating provisions

CZ 37: Income equalisation schemes

You could also call this:

“Money from some refunds might be income you need to pay tax on”

If you get a refund under section EZ 80 or section EZ 81, it might be income for you. This happens when the refund is interest you earned under section EH 6 or section EH 40. You have to include this income in the year you receive the refund.

If you get a refund under section EZ 80 or section EZ 81 and it is not interest, you do not have to include it as income. This is because it is excluded income, as long as it is not interest under section EH 6 or section EH 40. You do not have to pay tax on this type of refund.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS478224.

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Part C Income
Terminating provisions

CZ 37Income equalisation schemes

  1. A refund made to a person under section EZ 80 (Refund of excess deposit in main income equalisation account as consequence of election under section EZ 4B or FP 23) or EZ 81 (Refund of excess deposit in adverse event income equalisation account as consequence of election under section EZ 4B or FP 23) is, to the extent to which the refund is interest payable under section EH 6 (Interest on deposits in main income equalisation account) or EH 40 (Interest on deposits in adverse event income equalisation account), income of the person and is allocated to the income year in which the person receives the refund.

  2. A refund under section EZ 80 or EZ 81 is, to the extent to which the refund is not interest payable under section EH 6 or EH 40, excluded income.

Notes
  • Section CZ 37: inserted (with effect on 1 April 2017), on , by section 24(1) (and see section 24(2) for application) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section CZ 37(1): amended, on , by section 37 of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).