Tax Policy Bulletin

Long-term Insights Briefing Published

Inland Revenue has now published the 2026 Long-term Insights Briefing, which it released publicly in draft in June last year. The Long-term Insights Briefing was required to be prepared by government departments independently of Ministers which considered medium to long term significant challenges facing New Zealand.  The reports are not necessarily about immediate decisions, it is more about shaping strategic thinking and lifting the quality of public and policy debate on these significant issues by putting evidence and scenarios on the table. 

Departments which have published such reports include Inland Revenue, Treasury, Ministry of Business, Innovation & Employment and Ministry of Foreign Affairs and Trade and many others. All the Long-term Insight Briefings published to date are available here. You can find our Tax Tips covering the draft Long-term Insights Briefing here for the PwC view.

Taxation (Annual Rates for 2025-26, Compliance Simplification, and Remedial Measures) Bill Enacted into Legislation

Back in early March, the Finance and Expenditure Committee reported the Taxation (Annual Rates for 2025-26, Multinational Tax, and Remedial Matters) Bill (the Bill) back to Parliament, followed by a pair of amendment papers which introduced a number of additional matters including a relaxation of the existing thin capitalisation rules for foreign investment in New Zealand infrastructure projects. At the end of March the Bill was enacted as the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026.

While the final commentary has not yet been published, commentary to each of the latest amendment papers is available from Inland Revenue’s Tax Policy site. For the PwC perspective you can find our Tax Tips on the Bill as enacted.

Other recent announcements

• IS 26/10 Income tax implications of providing sponsorship. This interpretation statement considers the income tax implications for a business that provides sponsorship to an organisation, event, person or cause, where the taxpayer (the sponsor) intends that the sponsorship will promote or advertise the business.  The sponsorship may be provided in the form of money or by providing products or services. Fact sheet here. Published 20 April 2026.

• BN2026/35 – Investment Boost – Early monitoring of business awareness and investment response. In December 2025 Inland Revenue surveyed businesses on their views on Investment Boost. In February 2026, a briefing note relating to Investment Boost information was released. Published 31 March 2026.  

• Shortfall penalties – Inland Revenue has released a series of Interpretation Statements and accompanying Fact Sheets with regards to the application of shortfall penalties in a number of circumstances, summarised below:

  • IS 26/03 Shortfall penalties – requirements for a “tax position” and a “tax shortfall”. This interpretation statement explains the “tax position” and “tax shortfall” requirements common to the shortfall penalties in ss 141A to 141E of the Tax Administration Act 1994 (TAA). Accompanied by IS 26/03 FS 1

  • IS 26/04 Shortfall penalty for not taking reasonable care. This interpretation statement explains the meaning of “reasonable care” in relation to the shortfall penalty for not taking reasonable care in s 141A of the Tax Administration Act 1994. Accompanied by IS 26/04 FS 1

  • IS 26/05 Shortfall penalty for taking an unacceptable tax position. This interpretation statement explains the meaning of “unacceptable tax position” in relation to the shortfall penalty for taking an unacceptable tax position in s 141B of the Tax Administration Act 1994. Accompanied by IS 26/05 FS 1

  • IS 26/06 Shortfall penalty for gross carelessness. This interpretation statement explains the meaning of gross carelessness in s 141C of the Tax Administration Act 1994.  It discusses the circumstances that could be relevant in determining whether someone has been grossly careless and how to distinguish gross carelessness from lower levels of negligence.  It also discusses relevant case law and provides several practical examples for clarity. Accompanied by IS 26/06 FS 1

  • IS 26/07 Shortfall penalty for taking an abusive tax position. This interpretation statement (IS) explains the meaning of “abusive tax position” in relation to the abusive tax position shortfall penalty.  The IS also discusses relevant case law and provides several practical examples for clarity. There is separate guidance on the shortfall penalties provided in s 141A, 141B, 141C and s 141E of the Tax Administration Act 1994, the threshold requirements for a shortfall penalty (that there be a “tax position” and a “tax shortfall”) and reductions and other matters that may be relevant when a  shortfall penalty is imposed (Related Publications). Accompanied by IS 26/07 FS 1

  • IS 26/08 Shortfall penalty for evasion or a similar act. This interpretation statement (IS) explains the shortfall penalty for evasion or a similar act in s 141E of the Tax Administration Act 1994 (TAA).  The IS explains what is required to satisfy the knowledge requirement, and other requirements, for evasion or a similar act.  The IS also discusses relevant case law and provides several practical examples for clarity. It updates and replaces IS0062 for subsequent case law. There is separate guidance on the shortfall penalties provided in s 141A, 141B, 141C and s 141D of the TAA, the threshold requirements for a shortfall penalty (that there be a “tax position” and a “tax shortfall”) and reductions and other matters that may be relevant when a shortfall penalty is imposed (Related Publications). Accompanied by IS 26/08 FS 1

  • IS 26/09 Shortfall penalties – reductions and other matters. This interpretation statement is relevant where the Commissioner imposes a shortfall penalty for not taking reasonable care (s 141A), an unacceptable tax position (s 141B), gross carelessness (s 141C), an abusive tax position (s 141D), or evasion or similar act (s 141E).  It discusses when a shortfall penalty is reduced (or increased), what happens when a taxpayer could be liable for more than one penalty and the assessment, payment and disputing of shortfall penalties. There is separate guidance on the threshold requirements for a shortfall penalty (that there be a “tax position” and a “tax shortfall”) and the shortfall penalties provided in s 141A, 141B, 141C, 141D and s 141E of the Tax Administration Act 1994. Accompanied by IS 26/09 FS 1.

Open consultations

• ED0261 Options for relief from tax debt. The draft standard practice statement sets out the Commissioner’s practice when considering the options of debt relief from the requirement to pay tax, interest and/or penalties under the TAA 1994.  The options available to the Commissioner are to write-off amounts, enter into an instalment arrangement, remit amounts, or a combination of these options. Consultation closes 8 May 2026.
• PUB00544 Income tax – Bare trusts and mortgages. Under s YB 21, if a person holds something or does something as a nominee (including as a bare trustee) for another person, the other person is treated as if they hold or do that thing, and the nominee is ignored for tax purposes. Where a bare trust exists, the trustee’s only duties are to transfer the trust property as the beneficiary directs and, in the meantime, to take reasonable care of the trust property. This question we’ve been asked (QWBA) considers whether a bare trust can exist where the property held has a mortgage over it. Consultation closes 11 May 2026.
• PUB00511 Goods and services tax – Reduced value rule in s 10(6) for supplies of domestic goods and services in commercial dwellings. This draft interpretation statement considers s 10(6) of the Goods and Services Tax Act 1985, which provides for a reduced value for a supply of domestic goods and services in a commercial dwelling for more than 4 weeks. This reduced value rule results in an effective GST rate of 9%. The time from which the reduced value applies depends on whether the commercial dwelling is a residential establishment and whether there is upfront agreement that the domestic goods and services will be supplied for more than 4 weeks in total. Consultation closes 29 May 2026.
• Consultation on proposed Approved Information Sharing Agreement between Inland Revenue and New Zealand Customs Service Inland Revenue and Customs are seeking feedback on a proposed Approved Information Sharing Agreement (AISA). Consultation closes 5 June 2026.

Recently closed consultations

• PUB00508 Income tax – portfolio investment entity income from land development activities –This question we've been asked considers whether income derived from developing land, dividing it into lots and/or erecting buildings on the land for the purpose of sale is eligible income for a portfolio investment entity under s HM 12 of the Income Tax Act 2007.  It concludes that this income is eligible income under s HM 12. Consultation closed 15 April 2026.

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