Skip to main content

Delays to response times: It is taking longer than usual to answer calls and myIR messages, and to process some COVID-19 Support Payment applications. This is because of the impact of COVID-19. If possible, please contact us through your myIR account. Log in to myIR

Cost of Living Payment The Government has announced a Cost of Living Payment, which will be paid from 1 August 2022. You do not need to apply for this payment. If you are eligible, we’ll pay it into your bank account. Find out more

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.

Last updated: 23 Jun 2021
Jump back to the top of the page