Tax Policy Bulletin

Inland Revenue releases early findings on Investment Boost uptake and tax impact

Inland Revenue has released a briefing note outlining early findings on the impact of the Government’s Investment Boost policy, introduced from 22 May 2025. The note draws on a December 2025 survey of more than 800 businesses and modelling of changes to effective marginal tax rates (EMTRs).

The survey suggests the full economic impact will take time to materialise, as investment activity in 2025 largely reflects pre-existing plans and broader economic conditions, and around one third of respondents, particularly smaller businesses, reported limited awareness of the policy. However, the survey results appear to indicate early signs of behavioural change. Among firms that invested in 2025 and were ‘reasonably aware’ of the policy, 40% said Investment Boost had increased their investment spending over the past 12 months, including 11% reporting a significant increase. Looking ahead, 49% of those intending to invest over the next five years expect the policy to have a positive effect on their plans, with 14% anticipating a large increase in investment. The note also outlines the estimated tax impact. Investment Boost reduces the EMTR of the companies applying the scheme for their newly acquired capital assets. Inland Revenue modelling estimates an average EMTR reduction of around 5–6% across asset categories, with the precise benefit depending on the type of asset and mix of investments.

Recent Inland Revenue publications

• Reports to Ministers in 2026 Information release. This release summarises reports and briefing notes provided to the Minister of Revenue’s office by Inland Revenue. Issued 25 February 2026.
• TDS 26/01 Opening value of FIF income calculation –This item summarises a private ruling that considered the opening value for the fair dividend method of calculating the foreign investment fund income of a taxpayer whose transitional residence period has ended. Issued on 18 February 2026.

Open consultations

• IRRUIP18 Income tax – wrapping, bridging, lending, borrowing and staking cryptoassets –Cryptoassets are increasingly used in peer-to-peer transactions on the blockchain without the involvement of a central party, commonly referred to as decentralised finance (DeFi). This issues paper sets out the Commissioner’s initial views on the income tax consequences arising from common DeFi transactions such as wrapping, bridging, lending, borrowing and staking. The main issue that arises is whether these activities involve disposals of cryptoassets and acquisitions of different cryptoassets for tax purposes. Consultation closes 12 March 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. Consultation closes 13 March 2026.
• ED0267 Returns of capital: Off-market share cancellations – bright line tests and the Commissioner’s notice requirements and other matters – This operational statement provides guidance on the tax treatment of off-market share cancellations, focusing on the bright line tests and the Commissioner’s notice requirements under section CD 22 of the Income Tax Act 2007. It explains when payments made on share cancellations are not to be treated as dividends, the process for requesting a Commissioner’s notice, and the implications if a payment is later found to be a dividend. Consultation closes 23 March 2026.

Recently closed consultations

• PUB00516 GST - Court-awarded costs and disbursements – This draft interpretation statement considers whether court-awarded costs and disbursements and out-of-court settlement payments for costs and disbursements are subject to GST. This statement does not consider the GST treatment of court awards and out-of-court settlement payments more generally (eg, payments of damages). Consultation closed 20 February 2026.
• PUB00477 GST treatment of short-stay accommodation – This draft interpretation statement discusses the GST treatment of short-stay accommodation provided by hosts either through an electronic marketplace (such as Airbnb or Bookabach) or directly to guests. The statement approaches GST from the perspective of someone considering providing short-stay accommodation for the first time, and follows the lifecycle of a taxable activity of providing short-stay accommodation from initial registration through to de-registration. Consultation closed 16 February 2026.
• 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 closed 30 January 2026.

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