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New Zealand law explained for everyone

Income Tax Act 2007

Deductions - Specific rules for expenditure types

DB 68: Amounts paid for utilities distribution assets

You could also call this:

“How tax law treats money spent on utility distribution assets”

When you spend money on a utilities distribution asset or network, this law affects how that spending is treated. You need to think about the money as if it’s only for the asset, not the whole network. This helps decide if the expense is a capital expense or not. Capital expenses are treated differently from other expenses in tax law. Remember, a utilities distribution asset is a single part, while a utilities distribution network is the whole system. This law says to focus on the single part when figuring out if the expense is capital.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS837851.

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Part D Deductions
Specific rules for expenditure types

DB 68Amounts paid for utilities distribution assets

  1. This section applies when a person incurs expenditure in relation to either a utilities distribution asset or a utilities distribution network.

  2. For the purpose of determining whether the expenditure is capital in nature, the expenditure is treated as relating to a utilities distribution asset and is treated as not being incurred in relation to a utilities distribution network.

Notes
  • Section DB 68: inserted (with effect on 1 April 2008), on , by section 38(1) (and see section 38(2) for application) of the Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023 (2023 No 5).