Snapshot of recent developments

Tax legislation and Policy Announcements
 

Order made for applications for refund of FamilyBoost tax credit

On 26 February 2025, the Tax Administration (FamilyBoost Tax Credit — Extension of Dates to File Return of Income) Order 2025 (SL 2025/8) came into effect and applies to a person applying for a refund of a FamilyBoost tax credit for the quarters ending on 30 September 2024 and 31 December 2024 under section 41C of the Tax Administration Act 1994, and to their partner if applicable. If a person to whom the Order applies filed their last return of income after the date required by section MH 3(4) of the Income Tax Act 2007, and that date was before the Order came into force, the date is extended to 31 March 2025 for the purpose of the application for a refund.

New Zealand’s list of reportable jurisdictions updated

On 27 February 2025, the Tax Administration (Reportable Jurisdictions for Application of CRS Standard) Amendment Regulations 2025 (SL 2025/15) were notified in the New Zealand Gazette and came into force on 31 March 2025. The regulations amend the Tax Administration (Reportable Jurisdictions for Application of the CRS Standard) Regulations 2017 by adding Armenia, Jordan, Rwanda, Senegal, and Tunisia as reporting jurisdictions for reporting periods beginning on or after 1 April 2024.

On 24 March 2025, Inland Revenue published an update to AE 25/01 Participating jurisdictions for the CRS applied standard. Armenia, Jordan, Rwanda Senegal and Tunisia have been added as participating jurisdictions. The list of participating jurisdictions is important for financial institutions when conducting due diligence in respect of accounts held by passive non-financial entities.

Annual Rates Bill Amendment Paper – Trust disclosure rules

On 5 March 2025, an Amendment Paper for the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill was introduced by the Minister of Revenue. The paper includes proposed changes to the trust disclosure rules (amending section 59BA(2) of the Tax Administration Act 1994.

Information release: Taxation (Use of Money Interest Rates) Amendment Regulations 2024

On 6 March 2025, Inland Revenue published documents relating to the Taxation (Use of Money Interest Rates) Amendment Regulations 2024.

Information release: Student loan scheme repayment threshold

On 12 March 2025, Inland Revenue proactively released documents relating to the Student loan scheme repayment threshold (the ‘freeze’ at $24,128 per annum remains).

Rules of origin updated for ASEAN-Australia-New Zealand Free Trade Agreement

On 13 March 2025, the Customs and Excise (AANZFTA) Amendment Regulations 2025 were notified in the New Zealand Gazette. The Regulations come into force on 21 April 2025 and amend the Customs and Excise Regulations 1996 to update the rules of origin relating to the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA).

Tax Administration (FamilyBoost Tax Credit—Extension of Dates to File Return of Income) Orders

On 17 March 2025, Inland Revenue published two Order in Councils allowing FamilyBoost applicants filing late tax returns to access the FamilyBoost quarterly payments. FamilyBoost can only be applied for after filing the tax return required for the quarter they are applying for.

Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act

On 29 March 2025, the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Bill received Royal Assent and was passed into law.

Inland Revenue Statements and Guidance

Draft QWBAs: The bright-line test for selling residential land

On 24 February 2025, Inland Revenue announced that the Commissioner of Inland Revenue 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. The deadline for comments is 11 April 2025.

Inland Revenue: National standard costs for specified livestock determination

On 24 February 2025, Inland Revenue issued NSC 2025: The National Standard Costs for Specified Livestock Determination 2025. The determination is made in terms of section EC 23 of the Income Tax Act 2007. It shall apply to any specified livestock on hand at the end of the 2024-2025 income year where the taxpayer has elected to value that livestock under the national standard cost scheme for that income year.

Inland Revenue: Reserve Schemes

On 25 February 2025, Inland Revenue announced that it would be updating its system design for the Reserve Scheme Accounts, Income Equalisation (EQU), and Environmental Restoration (ERA). There have been some updates to the look and feel when managing reserve schemes in myIR. Additionally Inland Revenue have created new letters on making deposits, withdrawing amounts, annual interest postings and approaching 5-year expiry dates for EQU deposits.

Inland Revenue: Drought conditions in Taranaki region

On 27 February 2025, a medium-scale adverse event for the Taranaki region was declared because of hot, dry conditions and below average rainfall. To help affected farmers and growers Inland Revenue have made a ‘class of case’ determination for the Income Equalisation Scheme to allow late deposits for the 2024 year until 30 June 2025 and early withdrawals if the deposit was made before the Ministerial announcement on 27 February 2025.

TIB: Volume 37, Number 2 (February 2025)

On 28 February 2025, Inland Revenue published TIB Vol 37, No 2 (March 2025), which covers:

New legislation

• SL 2024/254: Taxation (Use of Money Interest Rates) Amendment Regulations 2024

Determinations

• FDR 2025/01: Determination under section 91AAO of the Tax Administration Act 1994 that investors in JPM Aggregate Bond-NZD Hedged Dividend Class X Shares may not use the fair dividend rate method to calculate FIF income
• FDR 2025/02: Determination the fair dividend rate method may not be used to calculate FIF income by investors in the iShares Core Global Aggregate Bond UCITS ETF–NZD hedged (Accumulating) share class

Interpretation statement

• IS 25/03: Income tax – identifying the relevant item of property for depreciation purposes

Case summary

• CSUM 25/04: Commissioner of Inland Revenue v Kaur

Technical decision summary

• TDS 25/01: Sale of leasehold interests in residential and commercial units

Draft QWBA: Does GST apply to a deposit the seller retains in a cancelled land sale agreement?

On 3 March 2025, Inland Revenue published a draft QWBA PUB00485. Inland Revenue states that GST does not apply to a deposit a seller retains in a cancelled land sale agreement. The deadline for comments is 17 April 2025.

Inland Revenue: Changes for incorporated societies

On 5 March 2025, Inland Revenue published a reminder that if a incorporated society was registered before 5 October 2023, it must reregister by 5 April 2026 to keep incorporated society status. The Companies Office has information about this change and what is required. It also explains what happens if an incorporated society choose not to reregister or does not reregister by 5 April 2026.

Inland Revenue: Improving myIR security campaign continues

On 5 March 2025, Inland Revenue announced they will continue to call people about updating and improving security in their myIR accounts. After receiving feedback from some customers that the calls feel like a scam, Inland Revenue will now send a secure message via myIR and only call after the message has been received.

Inland Revenue: Drought conditions across parts of NZ

On 7 March 2025, the Minister of Agriculture and Minister for Rural Communities declared a medium-scale adverse event for the Northland, Waikato, Horizons (Manawatū-Whanganui) and Marlborough-Tasman regions as a result of ongoing hot, dry conditions and below average rainfall. This declaration is an extension of the previous classification for the Taranaki region announced on 27 February 2025.

Interpretation Statement: What an employee share scheme is, the taxing date and apportionment

On 10 March 2025, Inland Revenue published IS 25/04: What an employee share scheme is, the taxing date and apportionment. This is the final Employee Share Scheme guidance document from the group of guidance documents consulted on in 2024. The Interpretation Statement covers what an employee share scheme is, arrangements that are excluded from being an employee share scheme, benefit and the share scheme taxing date, and apportionment.

Inland Revenue: GST on listed services: proposed changes

On 10 March 2025, Inland Revenue announced that Parliament is considering changes to the GST on listed services rules. These rules apply to online marketplaces, listing intermediaries and sellers of ride-sharing and ride-hailing, food and beverage delivery, and short-stay and visitor accommodation.

Inland Revenue are proposing changes they expect to become law later this month (when more information will be made available). These changes relate to the deduction rule for flat-rate credits, timing for accounting for GST on accommodation, taxable supply information, opting out, and flat-rate credits and income tax.

Inland Revenue: ACC earners’ levies set

On 11 March 2025, Inland Revenue announced the ACC earners’ levies have now been set for the 2025-26, 2026-27 and 2027-28 tax years. The rates can be found here.

Inland Revenue: eInvoicing Webinar

On 11 March 2025 Inland Revenue held a live eInvoicing webinar with MBIE, a recording of this webinar is available on the Inland Revenue website until 17 April 2025.

Inland Revenue: Reserve scheme

On 13 March 2025, Inland Revenue advised that as they update their system for Reserve Scheme Accounts, Income Equalisation (EQU), and Environmental Restoration (ERA), some information for EQU will be temporarily unavailable online. Inland Revenue have also acknowledged that a medium scale Adverse Event has been declared for Northland, Waikato, Taranaki, Horizons and Marlborough-Tasman regions that may impact EQU.

Inland Revenue: Former tax agent sentenced on tax fraud

On 13 March 2025, Inland Revenue advised a former tax agent was sentenced to home detention for sustained tax fraud (12 months, on 19 fraud charges). The Judge also ordered full reparation be paid.

Inland Revenue: Final repayment date nears for SBC loans

On 16 March 2025, Inland Revenue issued a press release reminding of the final repayment date for people who borrowed money through the Small Business Cashflow (SBC) loan. From June, Inland Revenue will default a loan if it has not been paid off. Default interest (calculated based on use of money interest of 10.88% plus standard interest rate of 3%) will be charged.

Inland Revenue Determination: GST on supplies through electronic marketplaces

On 17 March 2025, Inland Revenue published 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. The determination is made under section 60C(2BC) of the GST Act 1985. The determination applies for taxable periods starting on or after 1 April 2025 and ending on or before 31 March 2028.

Inland Revenue: QWBA: Income tax – How do the income tax rules apply when a close company provides short-stay accommodation?

On 17 March 2025, Inland Revenue published draft QWBA PUB00400 Income tax – How do the income tax rules apply when a close company provides short-stay accommodation? The QWBA 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. The consultation period ends 2 May 2025.

Inland Revenue: Provisional Tax issues (for returns filed 17 to 19 March 2025)

Inland Revenue have fixed issues some taxpayers had with provisional tax when an income tax return was filed or changed between 17 to 20 March 2025.

Inland Revenue: Two-step verification becoming compulsory for myIR

On 19 March 2025, Inland Revenue announced that from the evening of 28 April 2025, two-step verification (2SV) will be compulsory for all intermediaries, tax agents and potentially some clients.

Inland Revenue: Tax agents survey update (Oct-Dec 2024)

On 19 March 2025, Inland Revenue published highlights from its most recent Tax Agents Voice of the Customer (TAVOC) survey.

OS: Cash collateral is “money lent”

On 18 March 2025, Inland Revenue issued OS 25/01: Cash collateral is “money lent”. The OS outlines a change of view by the Commissioner of Inland Revenue and sets out the approach that the Commissioner of Inland Revenue 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 RWT or NRWT.

The Statement applies from 18 March 2025. However, the conclusion that cash collateral is money lent will be applied prospectively and to allow taxpayers to make the required changes to their systems and any alternative arrangements, the Commissioner expects customers to comply with the new view when taking tax positions from 1 April 2025. The Commissioner will not devote resources to identify incorrect compliance with the resident withholding tax or non-resident withholding tax regimes for previous periods.

Inland Revenue: Annual Rates Act webinars

On 19 March 2025, Inland Revenue launched its online prerecorded webinar series for changes in the Taxation (Annual Rates for 2024−25, Emergency Response, and Remedial Measures) Act. The webinars can be accessed here and cover:

• GST
• Income tax
• Best of the rest (international changes, service pack changes, updated rates and ‘other misc. changes that may be of interest’).

Technical Decision Summary: Output tax deductions, shortfall penalties

On 28 February 2025, Inland Revenue issued: TDS 25/03: GST – Output tax deductions, shortfall penalties. It related to a payment by a landlord to a tenant for failure to fulfil a contractual obligation, equal to the rent and outgoings of the tenant under the lease for a specified period. The landlord claimed a deduction from output tax for GST on this payment. The Tax Counsel Office ruled the landlord was not entitled to claim a deduction from output tax, but was not liable for a shortfall penalty.

Technical Decision Summary: Deductions and shortfall penalties (Adjudication)

On 7 March 2025, Inland Revenue issued TDS 25/04: Deductions and shortfall penalties. It relates to expenses claimed relating to education courses, motor vehicle and home office expenses, and GST input tax deductions claimed for expenses that were incurred prior to the effective date of the Taxpayer’s GST registration. The Tax Counsel Office ruled the expenses were deductible and GST input tax deductions could be claimed for some of the expenses.

Technical Decision Summary: GST – input tax, taxable activity, taxable supplies, registration (Adjudication)

On 10 March 2025, Inland Revenue issued TDS 25/05: GST – input tax, taxable activity, taxable supplies, registration. It related to whether a taxpayer had a valid taxable activity and whether legal services related the sale of land could be considered as input to a taxable supply. The Tax Counsel Office ruled there was a taxable activity but that the taxpayer had not proved the legal expenses were used for making a taxable supply.

Technical Decision Summary: Receipt of funding (Private Ruling)

On 12 March 2025, Inland Revenue published TDS 25/06: Receipt of funding. It related to funding received from the Crown passed to a subsidiary and used to acquire specified assets and as working capital. The Tax Counsel Office ruled this was a capital receipt.

Deloitte Global Perspectives

Australian Federal Budget delivered

On 25 March 2025, Australian Treasurer Jim Chalmers delivered the 2025-26 Australian Federal Budget. The centrepiece was personal income tax cuts for all Australian taxpayers, which will see the lowest marginal tax rate decline from 16% to 14% over two years.

Also announced was a deferral of the expanded Capital Gains Tax (CGT) regime applicable to foreign residents, which was previously meant to commence for CGT events occurring from 1 July 2025. This will be deferred so as to commence from the later of 1 October 2025 or the first quarter after the Act receives Royal Assent.

OECD Updates

Consolidated Report on Amount B

On 24 February 2025, the OECD published a consolidated report that incorporates the agreed materials on Amount B that have been released by the Inclusive Framework since February 2024 up until December 2024.

Taxing capital gains working paper

On 26 February 2025, the OECD published a working paper on the taxation of capital gains.

OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors

On 27 February 2025, the OECD published the report of the Secretary General setting out recent developments in international tax co-operation, including the OECD’s support of G20 priorities such as the implementation of the BEPS minimum standards, the Two-Pillar Solution, and tax transparency, as well as updates on initiatives to enhance tax certainty, and tax administration.

Latest BEPS Action 14 Mutual Agreement Procedure (MAP) peer review results

On 4 March 2025, the OECD released the latest BEPS Action 14 Mutual Agreement Procedure (MAP) peer review result.

Global Forum Capacity Building Report

On 6 March 2025, the Global Forum published the latest Global Forum Capacity Building Report. The report notes how developing countries reported close to 80% of the near EUR 4 billion additional revenue (tax, interest and penalties) identified by Global Forum members in 2023 in the context of the implementation and use of the tax transparency standards, with unprecedented revenues registered in Africa.

New Peer revies on transparency and exchange of information on request

On 18 March 2025, the Global Forum on Transparency and Exchange of Information for Tax Purposes published five new peer review reports transparency and exchange of information on request (EOIR) for Armenia, the British Virgin Islands, Burkina Faso, Côte d’Ivoire and Djibouti.

OECD Investment Tax Incentives Database 2024 update

On 19 March 2025, the OECD updated its Investment Tax Incentives Database (ITID). It provides insights into corporate income tax incentives for investment in 70 economies, mostly emerging and developing. The database highlights trends on the design, targeting and granting of corporate income tax incentives, notably in terms of instrument-specific design features and eligibility conditions, and whether they support sustainable development objectives. It also provides insights into the evolution of corporate income tax incentives over the 2022–24 period.

Corporate income tax, investment, and the Net-Zero Transition

On 20 March 2025, the OECD published a conceptual framework outlining key channels through which corporate income tax influences clean investment decisions and broader factors that mediate this relationship. It also identifies policy implications and potential policy options to enhance the alignment of corporate income tax with climate policy objectives.

Note: The items covered here include only those items not covered in other articles in this issue of Tax Alert.