Can I Claim Professional Fees (New Zealand) as a Business Expense in New Zealand?
Accounting, legal, consulting, and specialist fees are fully deductible when incurred for revenue (income-earning) purposes. Fees for capital transactions such as acquisitions or company restructuring must be capitalised, not expensed.
What Inland Revenue (IRD / Te Tari Taake) says
Sections DB 1 and DB 2 of the Income Tax Act 2007. Deductibility turns on whether the expenditure relates to deriving income (revenue) or acquiring a capital asset. The revenue vs capital distinction is fact-specific and determined by the primary purpose of the expenditure.
When you can claim
- Annual accounting, bookkeeping, and IRD return preparation fees
- Legal advice on supplier contracts, debt recovery, or employment disputes directly related to the business
- Consulting and specialist services directly connected to earning business income
- Ongoing compliance costs — company secretarial, regulatory filings related to revenue operations
When you cannot claim
- Legal fees for acquiring a competitor, purchasing land, or buying shares — these are capital costs added to the asset's cost base
- Costs of forming, incorporating, or restructuring a company
- Legal fees defending a criminal charge against the owner personally where unrelated to the business
Good to know
Pro tip: Where a fee covers both revenue and capital work (e.g. a lawyer handles both a contract dispute and a property acquisition), ask the solicitor or accountant to split the invoice so only the revenue portion is claimed.
Important: Professional fees relating to the purchase or sale of land or shares are capital, not deductible. When in doubt, obtain written confirmation from your adviser on how to characterise the fee.
Stop guessing what you can claim in New Zealand
AccountsOS automatically categorises expenses with Inland Revenue (IRD / Te Tari Taake)-aware rules and tells you exactly what is claimable.
Try Free