Tax Policy Bulletin is a regular round-up of recent tax headline news. If you'd like any further detail on the items reported in the update, please reach out to your usual PwC tax advisor.
31 March 2025
Tax Bill Receives Royal Assent
The Taxation (Annual Rates for 2024-25, Emergency Response, and Remedial Matters) Act (the Act) received Royal Assent on 29 March and has such been signed into law. The Act sets the annual rates of income tax for the 2024-25 tax year.
Other key items in the Act include the following:
- Confirmation of the annual rates of income tax for the 2024–25 tax year
- Tax relief measures for future emergency events
- Implementation of the OECD’s Crypto-Asset Reporting Framework (CARF)
- Amendments which affect the transfer of overseas pension and superannuation funds to New Zealand
- Allowing retrospective registration for Approved Issuer Levies (AIL) in limited circumstances
- Increases to the thresholds relating to exempt employee share schemes
- Introducing a “one-off” information sharing provision with the Ministry of Business, Innovation and Employment to encourage the use of NZBN numbers among unincorporated entities
These have been discussed in more detail in our Tax Tips article from August, and our previous Tax Policy Bulletin from the end of February.
PwC publications
Our Global Compliance Survey 2025 gathered insights from over 1,800 executives across 63 countries, revealing that compliance complexity is increasing worldwide. While New Zealand is a small market by global standards, the findings are highly relevant - regulatory change, digital transformation, and data-driven compliance are pressing concerns here too.
Read more
Recent Inland Revenue publications
- TDS 25/07 GST - Zero-rating, input tax deductions, shortfall penalties.
- OS 25/01 Cash collateral is “money lent”. This operational statement outlines a change of view by the Commissioner and sets out the approach that the Commissioner will be taking after changing his view on whether cash collateral provided as part of security lending and derivative transactions is “money lent”. The Commissioner’s view now is that interest arising on cash collateral may therefore be subject to obligations to withhold resident withholding tax (RWT) or non-resident withholding tax (NRWT).
- Tax Administration (Reportable Jurisdictions for Application of CRS Standard) Amendment Regulations 2025 This Order in Council adds Armenia, Jordan, Rwanda, Senegal, and Tunisia to New Zealand’s existing list of 106 reportable jurisdictions under the Common Reporting Standard.
- PUB00400 Income tax – How do the income tax rules apply when a close company provides short-stay accommodation? This QWBA explains how the income tax rules apply when a close company provides short-stay accommodation (eg, through Airbnb, Bookabach, Booking.com or Holiday Houses). It explains when and how the mixed-use asset rules and the standard tax rules apply, and when shareholders or employees will receive income from their use of the property.
- DET 25/01 GST on supplies through electronic marketplaces – hostel and motel opt-out agreement criteria. This determination sets criteria for when a person who supplies accommodation through an electronic marketplace (an underlying supplier) can enter into an opt-out agreement with the operator of an electronic marketplace.
Open consultations
- PUB00400 Income tax – How do the income tax rules apply when a close company provides short-stay accommodation? This QWBA explains how the income tax rules apply when a close company provides short-stay accommodation (eg, through Airbnb, Bookabach, Booking.com or Holiday Houses). It explains when and how the mixed-use asset rules and the standard tax rules apply, and when shareholders or employees will receive income from their use of the property. Consultation closes 2 May 2025.
- PUB00485 GST - Deposits a seller retains from cancelled land sale agreements. This QWBA explains the GST consequences when a land sale agreement is cancelled and the seller retains the deposit. It updates previous guidance from 2005. The answer remains that GST does not apply to the deposit but the reasoning has been expanded to consider matters that have arisen since the last statement was published that may have affected the answer. Consultation closes 17 April 2025.
- PUB00460: When is land acquired for a purpose or with an intention of disposal so that the amount derived from the sale is income? This draft QWBA provides guidance about the circumstances in which an amount derived from the disposal of land acquired with a purpose or intention of disposal is income under s CB 6. The QWBA explains how s CB 6 applies, and its relationship with the 2-year bright-line test. The proposed QWBA also discusses some common misconceptions about s CB 6 and includes examples illustrating when it will apply. This consultation is running in conjunction with PUB00488. Consultation closes 11 April 2025.
- PUB00488: The bright-line test for selling residential land. The Commissioner is seeking public feedback on changes to six existing QWBAs. The changes relate to the bright-line test for selling residential land. These updates will align the QWBAs with the current 2-year bright-line test, improving clarity for customers. Although the Commissioner is consulting on these updates, the substantive change relates to changes in the law since the original QWBAs were published. Consultation closes 11 April 2025.
- PUB00476: GST - taxable activity: This draft interpretation statement sets out the Commissioner’s view on the meaning of “taxable activity” under the GST Act. The Commissioner has discussed this concept in numerous public items, but generally in a specific context such as subdivisions of land, horse racing or horse breeding. This statement is of more general application. Consultation closes on 4 April 2025.
- Taxation and the not-for-profit sector: The consultation document considers whether certain tax concessions available to the sector continue to be effective. It also explores whether tax obligations can be simplified, and compliance costs minimised. Government will consider feedback and decide whether any changes should be made to current rules. Consultation closes on 31 March 2025.
For more information about upcoming consultations please see here for Tax Technical and here for Tax Policy.
Recently closed
- PUB00459: Income tax: Can I claim a deduction for expenses I incur on repairing a recently acquired capital asset? This QWBA considers whether a taxpayer can deduct for income tax purposes the amount of expenditure they have incurred to repair a capital asset that they have recently acquired so they can use it in their business or income-earning activity. Consultation closed on 28 March 2025.
- Consultation on employee share scheme timing issues. Inland Revenue has launched consultation on a policy proposal to address a taxation timing issue for employee share schemes offered by start-up companies. The proposal suggests deferring the taxation point for eligible schemes, as well as the company's deduction, until a liquidity event occurs to fund the tax on income. Officials seek views on the desirability and feasibility of such an approach. Consultation closed on 14 March 2025.
Follow us
