Section DU 4 — Income Tax Act 2007: Income appropriated to expenditure

DU 4 Income appropriated to expenditure When this section applies (1) This section applies when— (a) a mining company appropriates an amount of income to mining exploration expenditure or mining development expenditure; and (b) the company makes the appropriation within 2 months after the end of an income year or in a longer time allowed by the Commissioner; and (c) the amount that the company appropriates is no more than its net income in the income year, calculated as if this section did not exist. Deduction (2) The company is allowed a deduction for the part of the amount to which both the following apply: (a) it is not spent in the income year to which the appropriation relates; and (b) it will be, or is likely to be, used as mining exploration expenditure or mining development expenditure before the end of the second income year following the income year to which the appropriation relates. Timing of deduction (3) The deduction for the part of the amount is allocated to the income year to which the appropriation relates. Mining expenditure (4) The part of the amount to which subsection (2)(a) and (b) apply must be taken into account in the mining expenditure item of the formula in section DU 7(5) . Link with subpart DA (5) This section supplements the general permission and overrides the capital limitation. The other general limitations still apply. Defined in this Act: amount , capital limitation , Commissioner , deduction , general limitation , general permission , income , income year , mining company , mining development expenditure , mining exploration expenditure , net income , supplement , Compare: 2004 No 35 s DU 4