CA ANZ supports Inland Revenue’s work to update the 2002 interpretation statement on the tax treatment of sponsorship expenditure.

CA ANZ’s submissions include:

• The discussion in the draft statement regarding prepaid expenditure should be expanded to include consideration of Determination E12.
• The discussion about the donated trading stock rules should be simplified and the discussion about disposal in the course of carrying on business for the purpose of deriving income moved upfront.
• The criteria of needing to show that services provided under a sponsorship arrangement also benefits the recipient should be reviewed.
• The discussion and conclusions drawn about sponsorship of an employee should be reconsidered.