New Zealand Tax Agency Issues Interpretation Statement Clarifying Income Tax Deductibility of Sponsorship Expenditures

The New Zealand Inland Revenue April 20 issued Interpretation Statement No. IS 26/10 and a fact sheet, clarifying the income tax deductibility of sponsorship expenditures made by a business with the intent to advertise or promote the business. Topics covered include: 1) the general permission for deductibility of sponsorship expenditures of money, products, or services to organizations, events, individuals, or causes, that there be sufficient nexus between the expenditure and an income-earning process of the business; 2) partial deductibility insofar as an expenditure is partly incurred for a nonqualifying or prohibited purpose, or is subject to the capital or private ...