You can claim environmental expenses in certain situations.
When you can claim expenses
To claim expenses, all of the following conditions must apply:
- Your business is in New Zealand.
- As part of that business, or when you are ending business operations, you incur expenses to avoid, fix, or reduce the damaging effects of contaminated discharge or making noise.
- The expenses do not include reclaiming land, non-environmental dredging, or expenses related to the buying or acquiring of land.
- The expenses do not relate to revenue account property.
- No other provision allows a deduction for the expenses.
Deduction rates
Default deduction rates cover 4 cost categories
| General description of expense | Default deduction rate |
|---|---|
| Testing and feasibiliity expenses | 100% |
| Restoration expenses | 100% |
| Monitoring expenses | 100% |
| Construction or improvement expenses |
The lesser of:
|
If the default deduction rates do not give 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 balance of the expense - the original cost minus any deduction you’ve already claimed.
Tax Technical advice
Read more about deducting expenditure related to mitigating environment hazards.
Last updated:
03 May 2024