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Special income tax rules apply to local authorities.

Taxable income

A local authority must pay income tax on non-dividend income (for example, rent and management fees) received from a:

  • council-controlled organisation (CCO)
  • port company
  • energy company.

Exempt income

For local authorities, this income is exempt:

  • rates received from ratepayers
  • income from core services (like parking fees)
  • dividends received from a CCO, port company or energy company.

Limitations on income tax deductions 


Local authorities cannot claim a deduction for charitable or other public-benefit gifts made to donee organisations.


Local authorities cannot convert unused imputation credits to a tax loss.

Last updated: 08 Mar 2022
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