Tax Policy Bulletin

Labour announces 'small business action plan'

Labour has revealed another tax-relevant election policy, this time announcing a tax package targeting small businesses funded by the roll-back of the current government's Investment Boost accelerated depreciation scheme. Among other changes the announcement includes: 

• Raising the threshold for immediate asset write-off from $1,000 up to $10,000 (higher than the $5,000 threshold which applied during COVID)

• Raising the GST registration threshold from $60,000 up to $80,000 

• Requiring large businesses to pay small suppliers within 15 days on invoices of $25,000 or less

Non-compliance in Horticultural Sector 

Inland Revenue has published a Revenue Alert calling out what it describes as practices which result in tax not being correctly accounted for, and give an unfair advantage over complying taxpayers. The alert warns of investigations into taxpayers, and consequences including civil penalties and prosecution. 

Specifically the alert describes: 

• Incorrect deduction of withholding tax on schedular payments;

• Complex contracting arrangements obscuring the nature of labour supply arrangements – specifically the use of false invoices; 

• Workers being paid in cash, and the consequential impacts on meeting tax obligations, potential for money laundering, and worker exploitation.

The fact that the alert has been issued indicates that risk assessments are ongoing and investigations have begun. The alert specifically references a focus on growers, contractors, and subcontractors in the sector.

Other recent announcements:

• CSUM 26/10 – The Taxation & Charities Review Authority confirms the Commissioner’s denial of deductions was correct

  • L (the taxpayer) sought deductions for education expenses, motor vehicle expenses, and home office expenses. The taxpayer also challenged the Commissioner’s imposition of a shortfall penalty for not taking reasonable care.
  • The Authority denied the deductions sought on the basis that the deductions were not incurred as part of the taxpayer’s business, the taxpayer had failed to keep adequate records or otherwise show the deductions had been incurred, or the deductions had been incurred prior to the taxpayer’s registration for GST. The Authority agreed that the taxpayer had failed to take reasonable care in taking the tax positions. Published 28 July 2026.

• BR Pub 26/01 - 26/03 – GST – Directors’ fees and board members’ fees

  • The Commissioner previously issued three Public Rulings (BR Pub 23/01 – 23/03) on the GST treatment of directors’ fees and board members’ fees. 
  • Following a recent amendment to s 6(4) of the GST Act, parts of BR Pub 23/03 are now incorrect. See Tax Information Bulletin Vol 37, No 5 (June 2025):97.
  • Consequently, the Commissioner has decided to withdraw, update and reissue all three Rulings as they share a single Commentary. The associated Fact Sheet and QWBA have also been updated. All items have also been updated to reflect the change from tax invoices to taxable supply information, and for general clarity. A new summary table and flowchart have also been added to the Commentary and Fact Sheet. Published 6 August 2026.

• CSUM 26/11 Court of Appeal upholds High Court award of indemnity costs to the Commissioner

  • The appellant, Mr Jeremy McGuire, appealed two High Court judgments awarding indemnity costs of $50,274.71 to the Commissioner of Inland Revenue (the Commissioner). The Court of Appeal had previously struck out the underlying substantive appeal but allowed the appeal against the award of indemnity costs to proceed.
  • The appeal was dismissed, with costs and disbursements awarded to the Commissioner. Published 10 August 2026.

• TDS 26/10 & TDS 26/11 GST and income tax - amalgamation

  • These items summarise a pair of private rulings that considered the GST and income tax consequences of a company amalgamation. Published 14 August 2026.
• IS 26/13 Income tax – payments by employers on the death of an employee to executors and family
  • This interpretation statement considers whether amounts paid by employers on the death of an employee are taxable to the recipients, which could include executors and family members. The statement also considers the deductibility of payments made by employers, whether employers have PAYE obligations in respect of payments, and the duties of executors to file tax returns for the deceased employee and any estate that may arise. Published 17 August 2026.

Open consultations

• PUB00504 Income Tax cash incentives for banking customers

  • This question we’ve been asked explains the income tax treatment of a cash incentive payment (also known as a cashback payment) that a bank pays to a borrower who is a cash basis person under the financial arrangements rules. It explains when a cash incentive payment will not be taxable and will not give rise to any tax obligations for the borrower who receives it. It also explains when a cash incentive payment will be taxable and the time at which it must be accounted for when it is. Consultation closes 3 September 2026.

Recently closed consultations

• PUB00519 When a disposal of land will be part of a profit-making undertaking or scheme subject to income tax under s CB 3. 

  • This interpretation statement considers whether disposals of land can be subject to income tax under s CB 3 (Profit-making undertaking or scheme) or whether the land sale rules in the Income Tax Act 2007 are a code that comprehensively covers when land disposals are taxed. This interpretation statement concludes that s CB 3 can apply to tax disposals of land and provides guidance on when this may be the case. Consultation closed 13 August 2026.

• PUB00522 GST financial services – Services supplied in relation to retirement schemes.

  • This interpretation statement considers the GST treatment of services that the manager of a retirement scheme supplies to the scheme and that third-party outsourced providers supply to the manager of a retirement scheme. In both cases the key issue is whether the supplies are exempt supplies of financial services. This is a revised draft of the original item which went for consultation from 11 December 2025 to 13 March 2026. Consultation closed 14 August 2026.

For more information about upcoming consultations please see here for Tax Technical and here for Tax Policy.