Section CX 47 — Income Tax Act 2007: Government grants to businesses

CX 47 Government grants to businesses When this section applies (1) This section applies when— (a) a local authority or a public authority makes a payment to a person for a business that the person carries on; and (b) the payment— (i) is in the nature of a grant or subsidy to the person; or (ii) is a grant-related suspensory loan to the person; and (c) the payment is not in the nature of an advance or loan other than a grant-related suspensory loan; and (d) the payment corresponds to— (i) expenditure that they incur and for which they would be allowed a deduction in the absence of section DF 1 (Government grants to businesses): (ii) expenditure that they incur in acquiring, constructing, installing, or extending an asset for which they would have an amount of depreciation loss in the absence of section DF 1 . Excluded income (2) The payment is excluded income of the person. Exclusions (3) This section does not apply to a grant made under the Agriculture Recovery Programme for the Lower North Island and Eastern Bay of Plenty, to the extent to which the grant relates to expenditure— (a) incurred by the recipient before the grant; and (b) for which the recipient would be allowed a deduction in the absence of section DF 1 . Further exclusion (4) A person may choose that this section not apply to a payment under a grant to the extent to which— (a) the grant is made to the person for the person's business as a technology development grant or under a technology transfer voucher; and (b) the payment is withheld until the conditions of the grant are satisfied; and (c) in the absence of section DF 1 , the person would be allowed for an income year before the income year of the payment,— (i) a deduction for expenditure to which the payment corresponds: (ii) depreciation loss resulting from expenditure to which the payment corresponds. Defined in this Act: amount , business , deduction , depreciation loss , excluded income , grant-related suspensory loan , local authority , pay , public authority , Compare: 2004 No 35 s CX 41 Section CX 47(1)(a): substituted (with effect on 1 October 2010), on 21 December 2010, by section 35(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section CX 47(1)(b): substituted (with effect on 1 October 2010), on 21 December 2010, by section 35(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section CX 47(1)(c): substituted (with effect on 1 October 2010), on 21 December 2010, by section 35(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section CX 47(1)(d): substituted (with effect on 1 October 2010), on 21 December 2010, by section 35(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section CX 47(3) heading: substituted (with effect on 1 October 2009), on 6 October 2009, by section 56(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section CX 47(3): substituted (with effect on 1 October 2009), on 6 October 2009, by section 56(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section CX 47(4) heading: added (with effect on 1 October 2010), on 21 December 2010, by section 35(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section CX 47(4): added (with effect on 1 October 2010), on 21 December 2010, by section 35(2) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130). Section CX 47 list of defined terms large budget screen production grant : repealed (with effect on 1 October 2009), on 6 October 2009, by section 52(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).