INCOME TAX LAW

Dominion, Volume 31, Issue 296, 10 September 1938, Page 12

INCOME TAX LAW

Minor Amendments Made

PETROLEUM AND DAIRY COMPANIES Various minor amendments to the existing income tax law, particularly .as it applies to petroleum mining companies and dairy companies, are contained in the Finance Bill which, was introduced in the House of Representatives yesterday by Governor-General’s Message. The special provisions macle last year for the assessment of income tax on petroleum mining companies are extended so that they will apply to companies engaged in New Zealand in development work in relation to prospecting or mining for petroleum. If any dispute arises between the Commissioner of Taxes and a company as to whether money expended by the company was for development purposes, the difference will be determined by the commissioner, subject to the company’s right of objection. A new definition of the taxable income of petroleum mining companies is also included and special provision is made for dealing with returns of share capital. With regard to income tax payable by dairy companies, it is stated that the commissioner, in computing the taxable income of a dairy company covered by the legislation, will allow as expenses any sums set aside to provide for losses arising from an approved rationalisation plan. The provision will not apply to any losses incurred by the company in respect of the elimination of any dairy factory belonging to the company as in respect of the limitation' of areas of supply. This legislation is to be made retrospective to April 1, 1936. Various technical amendments are included covering the special provisions made last, year with regard to changes in the date of annual returns of income. Provision is also made for t lie granting of relief to taxpayers who have observed return dates for income between March 31 and October 1 in each year up to and including 1936.