Tax Policy Bulletin

Recent Inland Revenue publications

• IS 25/25 Income tax – business activity - This interpretation statement gives guidance on whether and when a taxpayer is carrying on a “business” for income tax purposes.  This is relevant to whether a person has income from a business under s CB 1 and to other provisions in the Income Tax Act 2007 where carrying on a business is a requirement. Issued 13 November 2025. 
• IS 25/24 Income tax and GST – industries other than forestry registered in the Emissions Trading Scheme - This interpretation statement applies to industries registered in the Emissions Trading Scheme, other than forestry which is taxed differently. The industries include those that are emissions intensive and trade exposed, as well as those involved in removal activities and some horticultural activities. The statement sets out the conceptual framework for the income tax treatment of emission liabilities and emissions units (NZUs) in these sectors. It then explains how to calculate deductions for emission liabilities and it discusses the treatment of NZUs as income. Finally, there is a brief discussion of the GST treatment of NZUs. Issued 11 November 2025. 
• IS 25/23 GST – Meaning of payment - This interpretation statement discusses the meaning of “payment” for GST purposes. The meaning of payment is relevant for determining the time of supply, the tax period for which you return output tax or for which you claim an input tax deduction, and eligibility for a secondhand goods input tax deduction. Issued 11 November 2025. 
• IS 25/22 GST – Secondhand goods input tax deduction - This interpretation statement discusses the requirements that must be met for a registered person to claim a secondhand goods input tax deduction. This includes, among other things, a discussion of the requirement that the goods be secondhand and the meaning of secondhand. This interpretation statement also discusses exceptions and restrictions on the amount of secondhand goods input tax deduction that can be claimed, including where the supplier and the recipient are associated persons. Issued 11 November 2025. 

Open consultations

• Income tax treatment of software development expenditure and SaaS customisation and configuration costs – Officials are seeking feedback to gain a better understanding of whether the current tax treatment of both software development expenditure and software as a service (SaaS) customisation and configuration costs leads to the correct outcomes. Consultation closes 30 January 2026
• PUB00470 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. Consultation closes 30 January 2026. 
• PUB00501 Tax Administration – shortfall penalties - These two interpretation statements with accompanying reading guide and facts sheets set out the Commissioner's view on the evasion shortfall penalty and the abusive tax position shortfall penalty. The interpretation statements have been updated for case law and legislative changes. The first interpretation statement explains the shortfall penalty when a person evades the assessment or payment of tax, or does any of the similar acts specified in s 141E of the Tax Administration Act 1994.  The second interpretation statement explains the meaning of “abusive tax position” in relation to the abusive tax position shortfall penalty in s 141D(7) of the Tax Administration Act 1994. These two statements complete the draft guidance on shortfall penalties. Consultation closes 15 December 2025. 
• PUB00507 When does the fringe benefit tax exclusion for benefits relating to health or safety apply? – This QWBA explains how the FBT exclusion for benefits relating to health or safety applies.  This QWBA is relevant to employers who provide their employees with benefits as part of their duty to manage risks to health or safety in the workplace.  For the exclusion to apply, there must be a connection between the benefit and the employer’s duty to manage risks to health and safety under the Health and Safety at Work Act 2015.  This QWBA complements the General Article on the health and safety FBT exclusion (2018) by providing more detailed guidance. Consultation closes 12 December 2025. 
• PUB00513 Working for Families tax credits and family scheme income – This interpretation statement gives an overview of eligibility for Working for Families tax credits and discusses the adjustments required to a person’s net income to determine family scheme income. Consultation closes 9 December 2025. 
• PUB00515 GST treatment of supplies of payment processing or facilitation services to merchants – The interpretation statement outlines how GST applies to entities providing payment processing or facilitation services, such as PSPs and BNPL providers. It provides a framework to determine whether services provided to merchants are financial services. When the supply to merchants includes settlement services, there will be a supply of financial services, and these supplies will be GST exempt (or zero-rated if applicable). The statement also explains whether there is a single supply or multiple supplies of services that may have different GST treatments. Consultation closes 8 December 2025. 
• PUB00510 Income tax – Can a deduction be claimed for asbestos removal costs? This question we’ve been asked explains what deductions a taxpayer can claim for the costs of removing asbestos from buildings, land or other assets that they own. Consultation closes 28 November 2025. 
• PUB00505 Income tax – deductibility of repairs and maintenance expenditure – general principles – This interpretation statement considers the general principles governing the income tax treatment of expenditure taxpayers incur in carrying out work on tangible property they use in a business or income-earning activity. It updates the Commissioner’s guidance from 2012 guidance with the same name (IS 12/03).  IS 12/03 is widely used and often referenced in other guidance.  Since depreciation is no longer allowed for buildings, it is now more important to correctly characterise repairs and maintenance expenditure. Consultation closes 28 November 2025. 
• PUB00509 Income tax implications of providing sponsorship – This consultation 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 their business. The sponsorship may be provided in the form of money or by providing products or services. Consultation closes 21 November 2025. 

Recently closed consultations

• PUB00500 Shortfall penalties – s141A, 141B and 141C of the Tax Administration Act 1994. The Commissioner is seeking public feedback on the update and replacement of the existing interpretation statements on the shortfall penalties for not taking reasonable care, taking an unacceptable tax position and gross carelessness.  The existing items are still technically correct but are being updated for a number of legislative changes and new case law. Key changes include:  
  • the circumstances in which a taxpayer who uses a tax agent will be treated as having taken reasonable care have been prescribed in the legislation and the removal of GST; 
  • and withholding-type taxes from the scope of the unacceptable tax position shortfall penalty.  

Consultation closed 31 October 2025.

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