Tax Policy Bulletin

Tax Bill

The latest tax bill - the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill (the Bill) was introduced to parliament on 26 August 2025. Dubbed the ‘compliance simplification’ bill in its title, the Bill notably does not include the majority of the proposals outlined in Inland Revenue’s consultation paper which aim to simplify fringe benefits tax (FBT) released earlier in the year and signalled as part of Budget 2025.

Key proposed changes include: 

• Digital nomads: new “non-resident visitor” category;
• New foreign investment fund calculation method  – Revenue Account Method;
• Employee share scheme: tax deferral regime for unlisted companies;
• Some FBT-related changes;
• Other measures: 
  • JV GST flow-through option; 
  • Income exemption for selling excess household electricity; 
  • Wider IR info-sharing via Ministerial agreement; 
  • Repeal of legislative trust disclosure provisions (noting commentary to the Bill indicates the Commissioner will continue to collect information by way of his general powers); 
  • Increase of cash-basis financial arrangement thresholds; 
  • Investment Boost remedials;
  • Repeal of s17GB of the Tax Administration Act 1994 (Commissioner’s power to request information for policy development purposes); 
  • Clarifies that SaaS contracts are excluded from NRCT.

See PwC’s latest Tax Tips here for further information on the Bill. 

For more tax policy information on the Tax Bill, see the following:

• Regulatory impact statements for items included in the Taxation (Annual Rates for 2025−26, Compliance Simplification, and Remedial Measures) Bill.
• Commentary on proposed amendments included in the Taxation (Annual Rates for 2025-26, Compliance Simplification, and Remedial Matters) Bill.

Recent Inland Revenue publications

• TDS 25/22 GST - supply of accommodation - This item summarises a private ruling that considered the GST treatment of the provision of accommodation in a building. Issued 4 September 2025.
• Overview of the Bright-line test - This overview lists relevant items of public guidance on the bright-line test, organised by subject. This includes: general guidance for common situations, exclusions from the bright-line test and rollover relief, transactions involving different types of entities, specific scenarios, technical decision summaries. Issued 2 September 2025.
• TIB Vol 37 No 8 Tax information bulletin September 2025 - The tax information bulletin covers a range of determinations, interpretation statements, questions we’ve been asked, and technical decision summaries published recently by Inland Revenue. Issued 1 September 2025. 
• Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations (No 2) 2025 - This Order in Council commentary provides information on a decrease to the fringe benefit tax prescribed rate of interest for low-interest employment-related loans, applying from 1 July 2025. Issued 25 August 2025.
• Income Tax (Deemed Rate of Return on Attributing Interests in Foreign Investment Funds, 2024–25 Income Year) Order 2025 - This Order in Council commentary provides information on a change in the deemed rate of return for taxing interests in foreign investment funds, effective from 1 April 2025. Issued 25 August 2025.

Open consultations

• PUB00476 GST – taxable activity. This is a re-consultation of PUB00476, following on from the external consultation from 24 February 2025 to 18 April 2025. As a result of the number of submissions received on that earlier exposure draft, the additions made to the statement as a result, and particularly the increase in the number of examples, it has been decided to re-consult the item to seek further feedback/comment. Consultation closes 8 September 2025.
• PUB00520 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. Consultation closes 10 September 2025.
• PUB00514 GST – Secondhand goods input tax deduction. This draft 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. Consultation closes 10 September 2025.
• PUB00521 Income tax – Public private partnership projects and business continuity test for losses. This question we’ve been asked considers whether a major change in the nature of a contractor’s business activities occurs under the business continuity test for losses when a public private partnership project moves from a design and construction phase to an operating and maintenance phase. Consultation closes 19 September 2025.
• 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. Consultation closes 31 October 2025.

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

Recently closed

• Draft of Inland Revenue's long-term insights briefing 2025 Inland Revenue is seeking feedback on a draft of its next long-term insights briefing (LTIB). The LTIB provides information on long-term trends, risks and opportunities as well as possible policy responses. It explores the implications of rising fiscal pressures for New Zealand’s tax system and what changes could be made to our tax system to enhance fiscal resilience. Consultation closed 1 September 2025.

• PUB00478 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. Consultation closed 5 September 2025.