Section DS 2 — Income Tax Act 2007: Film production expenditure

DS 2 Film production expenditure Deduction (1) A person is allowed a deduction for film production expenditure if— (a) the film is completed; and (b) the person has a film right in it— (i) before it is completed: (ii) at the time it is completed: (iii) after it is completed. Inclusions (2) For the purposes of subsection (1),— (a) if a person ( person A ) reimburses another person ( person B ) for film production expenditure that person B incurs, and does it before the film is completed, the reimbursement is treated as film production expenditure incurred by person A; and (b) if a person ( person A ) reimburses another person ( person B ) for expenditure on interest incurred by person B in producing the film, person A may treat the reimbursement as film production expenditure incurred by person A. Exclusion (3) This section does not apply to film production expenditure if the film— (a) is produced mainly for broadcast in New Zealand by a person who operates a television station, a television network, or a cable television system: (b) is intended to be shown as an advertisement: (c) section DS 2B applies to the film production expenditure. Timing of deduction (4) The deduction is allocated under— (a) section EJ 4 or EJ 5 (which relate to expenditure incurred in acquiring film rights) if the film is one for which a large budget film grant is made; or (b) section EJ 7 or EJ 8 (which relate to film production expenditure) if the film is not one for which a large budget film grant is made. No other deduction (5) No other deduction for film production expenditure is allowed under a provision of this Act other than section DS 2B . Avoidance arrangements (6) The amount of the deduction may be reduced or the timing of the deduction may be delayed under— (a) section GB 17 (Excessive amounts for film rights or production expenditure): (b) section GB 18 (Arrangements to acquire film rights or incur production expenditure): (c) section GB 19 (When film production expenditure payments delayed or contingent). Link with subpart DA (7) The link between this section and subpart DA (General rules) is as follows: (a) it overrides the capital limitation; and (b) the other general limitations still apply; and (c) either— (i) the general permission must be satisfied; or (ii) a provision that supplements the general permission must be satisfied. Defined in this Act: arrangement , capital limitation , completed , deduction , film , film production expenditure , film right , general limitation , general permission , large budget film grant , New Zealand , pay , supplement , Compare: 2004 No 35 s DS 2 Section DS 2(3) heading: substituted, on 1 April 2008, by section 346(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section DS 2(3): substituted, on 1 April 2008, by section 346(1) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section DS 2(4) heading: substituted, on 1 January 2010, by section 95(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section DS 2(4): substituted, on 1 January 2010, by section 95(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section DS 2(4)(a): amended (with effect on 1 January 2010), on 7 September 2010, by section 23(1)(a) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section DS 2(4)(b): amended (with effect on 1 January 2010), on 7 September 2010, by section 23(1)(b) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section DS 2(5): amended, on 1 April 2008, by section 346(2) of the Taxation (Business Taxation and Remedial Matters) Act 2007 (2007 No 109). Section DS 2 list of defined terms government screen production payment : repealed (with effect on 1 January 2010), on 7 September 2010, by section 23(2)(a) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section DS 2 list of defined terms government screen production payment : inserted, on 1 January 2010, by section 95(2)(b) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34). Section DS 2 list of defined terms large budget film grant : inserted (with effect on 1 January 2010), on 7 September 2010, by section 23(2)(b) of the Taxation (Annual Rates, Trans-Tasman Savings Portability, KiwiSaver, and Remedial Matters) Act 2010 (2010 No 109). Section DS 2 list of defined terms large budget screen production grant : repealed, on 1 January 2010, by section 95(2)(a) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).