Section IS 5 — Income Tax Act 2007: Petroleum miners’ tax losses

IS 5 Petroleum miners’ tax losses When this section applies (1) This section applies in a tax year in which a petroleum miner with a tax loss for the tax year— (a) relinquishes a petroleum permit for which they have a deduction under section DT 7 (Exploratory well expenditure); or (b) incurs expenditure on removal or restoration operations for which they have a deduction under section DT 16 (Removal or restoration operations). Net losses reduced (2) The petroleum miner's tax loss is reduced by the amount of the deduction, but only to the extent of the amount of the tax loss. For the reduction in their tax loss, the petroleum miner is allowed a deduction in an earlier tax year for an amount that is equal to the amount of the reduction. The deduction is allocated under section EJ 14 (Spreading deduction backwards). Petroleum mining activities outside New Zealand (3) This section applies to a petroleum miner who undertakes petroleum mining activities that are— (a) outside New Zealand and undertaken through a branch or a controlled foreign company (CFC); and (b) substantially the same as the petroleum mining activities governed by this Act. Using tax loss components (4) A shareholder company may use a tax loss component referred to in section IZ 2(2) (Petroleum mining companies: treatment of payments from shareholders) but only in the way described in section IZ 2(3) to (6) . Defined in this Act: amount , CFC , deduction , New Zealand , petroleum miner , petroleum permit , relinquishment , removal or restoration operations , tax loss , tax year Compare: 2004 No 35 ss IH 2(1) , IH 3 Section IS 5(2): substituted (with effect on 1 April 2008), on 7 December 2009, by section 71(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).