Income tax and GST – industries other than forestry registered in the Emissions Trading Scheme

This interpretation statement applies to industries registered in the Emissions Trading Scheme, other than forestry which is taxed differently. The industries include those that are emissions intensive and trade exposed, as well as those involved in removal activities and some horticultural activities. The statement sets out the conceptual framework for the income tax treatment of emission liabilities and emissions units (NZUs) in these sectors. It then explains how to calculate deductions for emission liabilities and it discusses the treatment of NZUs as income. Finally, there is a brief discussion of the GST treatment of NZUs.
For a discussion on forestry activities registered in the ETS see: IS 25/13: Income Tax and GST – forestry activities registered in the Emissions Trading Scheme.