IS 18/06
Issued
05 Nov 2018

Income tax – treatment of costs of resource consents

This Interpretation Statement addresses the various ways that the cost of a resource consent can be deducted or depreciated. Depending on the circumstances, expenditure may be deductible under the principles in IS 17/01: “Income tax – deductibility of feasibility expenditure”, as expenditure on revenue account or under a specific provision in the Income Act 2007. In terms of depreciation, the Act treats certain resource consents as items of depreciable intangible property and allows the cost to be depreciated over the fixed life of the consent. Where resource consents are not depreciable intangible property the expenditure may be able to be capitalised into the cost base of another item of depreciable property and depreciated.