Ngā tangohanga mō ngā whakapaunga taiao Environmental expenses

You can claim environmental expenditure as an expense if: 

• the taxpayer is in business in New Zealand
• the taxpayer’s business includes testing, construction, restoration, or monitoring
• it does not include land reclamation, non-environmental dredging or expenditure related to the acquisition of land
• it does not relate to revenue account property
• tax deduction is not provided for elsewhere, including farming business expenditures that are not covered by specific agricultural provisions.

Deduction rates

The default deduction rates cover 4 categories of costs.

• Testing and feasibility expenditure: 100% deductible.
• Restoration expenditure: 100% deductible.
• Monitoring expenditure: 100% deductible.
• Construction or improvement expenditure is either:
• the lesser of either 35 years (1/35 deductible per year)
• the length of the applicable resource consent granted (1/life of resource consent deductible per year). You can use a straight-line deduction or adjust the rate to give a diminishing value deduction.

If the default deduction rates do not result in the correct calculation and taxation of income from business activities, you can apply to us for a category-specific rate.

Destruction or closure

If an environmental improvement is destroyed or a business closes, you can claim the remaining unamortised balance of the expenditure - the original cost, minus any deduction already claimed.