Snapshot of recent developments

Tax legislation and Policy Announcements

Information release: Tax Administration Order 2025

On 16 July 2026, Inland Revenue published an information release of documents relating to the Tax Administration (Extension of Application Deadline for Research and Development Tax Credits) Order 2025.

Inland Revenue Technical Updates

Draft Interpretation Statement: When a disposal of land will be part of a profit-making undertaking or scheme subject to income tax under s CB 3

On 2 July 2026, Inland Revenue published draft interpretation statement PUB00519: When a disposal of land will be part of a profit-making undertaking or scheme subject to income tax under s CB 3 for consultation. The statement considers whether disposals of land can be subject to income tax under section CB 3 (profit-making undertaking or scheme) or whether the land sale rules in the Income Tax Act 2007 are a code that comprehensively covers when land disposals are taxed. 

The statement states the Commissioner’s position that the specific land sale provisions are not intended to be a code, and that section CB 3 can apply to tax land disposals. However, it reverses the Commissioner’s previous view that s CB 3 cannot apply to undertakings or schemes involving the development and subdivision of land. The statement concludes that there are limited circumstances in which s CB 3 may apply as an alternative to ss CB 12 or CB 13. The closing date for submissions on the draft statement was 13 August 2026.

Inland Revenue: Tax Information Bulletin - July 2026 (Vol. 38, No 6)

On 1 July 2026, Inland Revenue issued its July 2026 Tax Information Bulletin. The Tax Information Bulletin covers the following recent tax developments:

Act commentary

• Taxation (Budget Measures) Act 2026 – Act commentary

Determinations

• DET 09/02 (CPI 2026): 2026 CPI Adjustment for Determination DET 09/02: Standard-cost household service for childcare providers
• DET 19/01 (CPI 2026) 2026 CPI adjustment to DET 19/01: Household boarding service providers
• DET 19/02 (CPI 2026) 2026 CPI adjustment to DET 19/02: Short-stay accommodation

Operational statements

• OS 19 03 (CPI 2026) 2026 CPI adjustment to Operational Statement OS 19/03: Square metre rate for the dual use of premises
• OS 19/04 (KM 2026) The Income Tax (Kilometre Rates for the Business Use of Vehicles for the 2025-26 income year) Instrument 2026

Interpretation statement

• IS 26/12 Working for Families tax credits and family scheme income

Case summaries

• CSUM 26/06 High Court allows leave to appeal and orders backdating of charities reregistration
• CSUM 26/07 High Court dismisses application for interim stay and grants application to strike-out paragraphs of the statement of defence on basis of s 109 of the Tax Administration Act 1994

Draft Interpretation Statement: GST financial services – Services supplied in relation to retirement schemes

On 17 July 2026, Inland Revenue reissued draft interpretation statement PUB00522: GST financial services – Services supplied in relation to retirement schemes for consultation. The statement considers the GST treatment of services that the manager of a retirement scheme supplies to the scheme, and that third-party outside 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. The revised draft follows consultation on the original item, which was released for public consultation in December 2025. Submissions on the draft closed 14 August 2026.

Question We’ve Been Asked: Income tax – Bare Trusts and mortgages
On 27 July 2026, Inland Revenue published question we’ve been asked QB 26/04: Income tax – Bare Trusts and mortgages. The QWBA considers whether a bare trust can exist where trust property is subject to a mortgage. Inland Revenue concludes that a person can still be a bare trustee under section YB 21 where there is a mortgage over the property, provided the trustee acts solely on the beneficiary’s directions and has no independent powers, discretion or active management responsibilities. In those circumstances, the beneficiary is treated as having obtained the mortgage and held the property for tax purposes. However, where a trustee exercises independent judgement or discretion in obtaining a mortgage or managing the property, they will not be a bare trustee and section YB 21 will not apply. The Question We’ve Been Asked replaces interpretation statement IS 23/02 to the extent that it is inconsistent with this position.

Tax Cases and Technical Decision Summaries

Case Summary: High Court upholds section 109 bar and declines stay of debt recovery proceedings
On 30 June 2026, Inland Revenue issued case summary CSUM 26/07: High Court dismisses application for interim stay and grants application to strike-out paragraphs of the statement of defence on basis of s 109 of the Tax Administration Act 1994. The case concerned a taxpayer who sought to stay debt recovery proceedings pending judicial review of the Commissioner’s refusal to amend assessments under s 113 of the Tax Administration Act 1994. The High Court declined the stay, finding no exceptional circumstances justified delaying recovery action and that there was little prospect the assessments would ultimately be amended. The Court also struck out parts of the taxpayer’s statement of defence, holding that section 109 prevented the taxpayer from re-litigating the correctness of assessments that had already been determined by the Taxation Review Authority.

Case Summary: High court dismisses judicial review

On 1 July 2026, Inland Revenue issued case summary CSUM 26/08: High court dismisses judicial review. The case concerned a taxpayer who sought judicial review of the Commissioner’s refusal to consider a section 113 application to amend income tax assessments that had already been upheld through the statutory disputes and challenge process. The High Court dismissed the application, finding that the correctness of the assessments had already been finally determined by the TRA and that issue estoppel prevented the taxpayer from re-litigating those issues through judicial review. The Court also held that the Commissioner was entitled to treat the assessments as correct and decline to consider the s 113 application. The decision confirms that taxpayers cannot use judicial review to revisit the correctness of assessments that have already been conclusively determined by a court.

Technical Decision Summary: Employee allowances – tax exemption and PAYE treatment

On 17 July 2026, Inland Revenue published technical decision summary TDS 26/07: Employee allowances – tax exemption and PAYE treatment. The Technical Decision Summary considers a private ruling on the income tax and PAYE treatment of various employee allowances, including meal, tool, transport, laundry and telephone allowances. The Tax Counsel Office concluded that these allowances are exempt income only to the extent they meet the specific statutory exemption requirements, such as reimbursing work-related costs or expenses. Meal, tool and transport allowances may be partly or fully taxable depending on the circumstances, while laundry allowances for distinctive work clothing are exempt. To the extent an allowance is not exempt income, it will be treated as employment income subject to PAYE withholding.

Technical Decision Summary: Disposal of property and shortfall penalties

On 23 July 2026, Inland Revenue published Technical Decision Summary TDS 26/08: Disposal of property and shortfall penalties. The Technical Decision Summary considers an adjudication concerning the sale of a subdivided section by a property development company and whether the proceeds were taxable under section CB 6 of the Income Tax Act 2007. The Tax Counsel Office concluded that the taxpayer had a purpose or intention of disposal at the time the property was acquired and was therefore liable for income tax on the sale. While a shortfall penalty for gross carelessness was not applied, Inland Revenue determined that the taxpayer had taken an unacceptable tax position and was liable for the corresponding shortfall penalty.

Technical Decision Summary: Excepted financial arrangement

On 24 July 2026, Inland Revenue published Technical Decision Summary TDS 26/09: Excepted financial arrangement. The Technical Decision Summary considers a private ruling concerning whether a 10-year supply agreement qualified as a “short-term agreement for sale and purchase” and therefore an excepted financial arrangement. The arrangement involved the ongoing supply of products, with monthly invoicing and payment due by the 20th of the following month. The Tax Counsel Office concluded that the agreement was an excepted financial arrangement under section EW 5(22) and, accordingly, was not a financial arrangement for income tax purposes.

Product Rulings

Product Ruling: Reach Media New Zealand Limited

On 15 May 2026, Inland Revenue published a number of product rulings relating to distributors, drivers and supervisors engaged by Reach Media New Zealand Limited to deliver unaddressed mail. The rulings confirm that payments made under the relevant contracts are not treated as salary or wages, schedular payments, or employment income for PAYE purposes. The rulings also confirm that the services provided under the contracts constitute taxable activities for GST purposes and are not excluded as employment-related services.

Product Ruling: Ministry of Education

On 19 May 2026, Inland Revenue published product ruling BR Prd 26/07: Ministry of Education. The product ruling confirms that the payment of scholarships by the Pacific Education Foundation to eligible tertiary students under the Tulī Takes Flight Scholarships and Pacific Education Foundation Scholarships programmes will be exempt income for the students under s CW 36 of the ITA07.

Inland Revenue Media Releases and Other Updates

Inland Revenue: Registering new business tax accounts in myIR

On 6 July 2026, Inland Revenue published an update on the way business tax accounts are registered in myIR. International exchange accounts and withholding tax accounts have already been separated into logical groups in the Intermediary Centre. Additional accounts will be separated in two groups on 15 July 2026 and 12 September 2026.

Inland Revenue: Protecting your myIR account and client information

On 29 June 2026, Inland Revenue announced that it is adding extra protection to help protect tax agents from identity fraud and reduce the risk of refunds being paid to incorrect bank accounts. Inland Revenue may place a short hold on refunds when new bank accounts are added, to give tax agents time to contact Inland Revenue if the agent or an authorised representative did not make the bank account change.

Inland Revenue: Overdue tax and late tax return payments – automated messages

On 1 July 2026, Inland Revenue announced that it will be contacting groups of taxpayers who have overdue tax of at least $100, or overdue tax returns. Taxpayers may receive a pre-recorded call or voicemail message from this Inland Revenue number: 0800 951 758.

Inland Revenue: TCO update on current public guidance work programme

On 9 July 2026, Inland Revenue updated the Tax Counsel Office’s current Public Guidance work programme for 2025/26.

Inland Revenue: 2025-2026 kilometre rate guidance

On 8 July 2026, Inland Revenue announced that it is considering providing more guidance on kilometre rate reimbursements made by employers in the current (2026-27) income year, due to changes in fuel prices. In the meantime, Inland Revenue has asked that tax agents continue to use either the 2025-2026 kilometre rates or a method that provides a reasonable estimate of employees’ costs.

Inland Revenue: Support for severe weather conditions

On 15 July 2026, Inland Revenue issued an invitation to taxpayers affected by the severe weather conditions in the Kaikoura, Waitaki, South Wairarapa and Wairoa districts, and the Marlborough region to contact Inland Revenue for support if needed. Taxpayers should include the word “weather” in the myIR correspondence.

Inland Revenue: overdue debt and returns

On 15 July 2026, Inland Revenue announced that it will be contacting taxpayers with overdue debt who have been through a full billing cycle and have not yet responded to Inland Revenue’s messages. Inland Revenue advised that if taxpayers do not respond to their future contact attempts, its Community Compliance team may visit the taxpayer, or Inland Revenue may make a deduction from the taxpayer’s bank account directly.

Inland Revenue: update: registering new business tax accounts in myIR now live

On 27 July 2026, Inland Revenue announced that changes to the account registration process for FBT, PIE, GMD and OGD tax types are now available in myIR.

OECD updates

2026 Economic Impact Assessment of the Global Minimum Tax (GMT)

On 15 July 2026, the OECD published its report the 2026 Economic Impact Assessment of the Global Minimum Tax (GMT), which provides new estimates of the expected effects of the GMT and presents preliminary evidence from its first year of implementation. Relative to a hypothetical scenario where the GMT was not implemented anywhere, the analysis found that average jurisdiction-level effective tax rates are estimated to increase by 2.8-3.7 percentage points on average under the current GMT framework, with effective tax rates in investment hubs estimated to rise by 5.5-6.9 percentage points.

MNE Responses to the Global Minimum Tax

On 15 July 2026, the OECD published its working paper MNE Responses to the Global Minimum Tax. The paper provides an early empirical, ex post assessment of how MNEs have responded to the introduction of the Global Minimum Tax (GMT).

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