Section DZ 11 — Income Tax Act 2007: Film reimbursement scheme on or before 30 June 2001

DZ 11 Film reimbursement scheme on or before 30 June 2001 Film reimbursement scheme (1) Section DS 3 (Clawback of deductions for film reimbursement schemes) does not apply to a deduction for expenditure that relates to a film and is incurred by a person ( person A ) under a film reimbursement scheme if— (a) the scheme is entered into on or before 30 June 2001; and (b) the film has, under section EJ 6 (Certification of New Zealand films),— (i) a final certificate that it is a New Zealand film; or (ii) a provisional certificate, not obtained by the provision of materially incorrect information to the New Zealand Film Commission, that it is a New Zealand film; and (c) the film had not been completed before 7 July 1999; and (d) before 7 July 1999,— (i) 1 or more contracts had been entered into for the supply of goods or services in New Zealand in relation to the film; and (ii) at least $1,000,000 of expenditure had been incurred under the contract or contracts; and (e) on or before 1 November 1999, a person who entered into a contract referred to in paragraph (d)(i) gave notice to the Commissioner that the requirements of paragraphs (c) and (d) were met; and (f) the expenditure for which persons are allowed a deduction under section DS 1 (Acquiring film rights) or DS 2 (Film production expenditure) is no more than 140% of the physical cost of production of the film; and (g) without limiting the application of section BG 1 (Tax avoidance), on the date the film reimbursement scheme is entered into, there is an expectation based on reasonable commercial assumptions that the income to be derived by person A as a result of the expenditure will be at least equal to the sum of— (i) all expenditure incurred by person A under the scheme; and (ii) a return on each amount of expenditure that is equivalent to the return on 5 year government stock measured on the date that the scheme is entered into; and (h) if the expenditure is incurred on depreciable intangible property of a kind listed in schedule 14 (Depreciable intangible property), the expenditure is an amount paid to person B in the circumstances described in subsection (2). Circumstances for purposes of subsection (1)(h) (2) For the purposes of subsection (1)(h), the circumstances are that— (a) the amount paid is income of person B; or (b) at all times in the tax year in which the payment is made, person B— (i) is resident in a country or territory specified in schedule 24, part A (International tax rules: grey list countries); and (ii) is liable to income tax in that country or territory by reason of domicile, residence, place of incorporation, or place of management in that country or territory; and (iii) has calculated its income that is liable to income tax in that country or territory without applying a feature of the taxation law of the country or territory specified in schedule 24, part B . Some definitions (3) In this section,— government stock means stock issued under Part 6 of the Public Finance Act 1989 physical cost of production means the expenditure incurred in producing a film, whether incurred in New Zealand or elsewhere, other than expenditure incurred— (a) in marketing or selling the film; and (b) on depreciable intangible property of a kind listed in schedule 14 . Link with subpart DA (4) This section overrides the general permission. Defined in this Act: amount , Commissioner , completed , deduction , depreciable intangible property , film , film reimbursement scheme , general permission , government stock , income , income tax , New Zealand , notice , pay , physical cost of production , tax year , year , Compare: 2004 No 35 s DZ 11