Snapshot of recent developments

Tax legislation and policy announcements

Public remedials log (October 2025)

The Public Remedials Log has been updated for October.

Tax changes in redesign of vocational education and training system

On 21 October 2025, the Education and Training Amendment Act received Royal Assent. Part 2 of the Act amends the Income Tax Act 2007 to provide that the income of the Federation of Polytechnics Committee and an industry skills board are exempt from income tax. The amendment is effective on 22 October 2025.

South Korea and New Zealand conclude negotiations for revision to tax treaty

On 5 November 2025, Tax Notes reported that South Korea and New Zealand completed in principle negotiations for a revision to the 1981 double-tax agreement, amended by the 1997 protocol.

Parliament (Repeals and Amendments) Act 2025 passed into law

On 12 November 2025, the Parliament (Repeals and Amendments) Act 2025 received Royal assent. The Act contains a number of amendments to other Acts. Part 3, subpart 3, sch 2, contains minor and consequential amendments to tax legislation including amendments to sections CW 31, CX 33B and YA 1 of the Income Tax Act 2007, and amendments to s 6(3)(c)(i) of the Goods and Services Act 1985.

Agreement between New Zealand and Croatia for the elimination of double taxation

On 20 November 2025, the double-tax agreement between New Zealand and Croatia, which has already been initialled, was signed by Croatia. New Zealand is yet to sign the agreement.

Inland Revenue statements and guidance

Inland Revenue: purchase price allocation Commissioner of Inland Revenue notifications

On 16 September 2025, Inland Revenue released information as part of an Official Information Act request on the number of Purchase Price Allocations the Commissioner of Inland Revenue has been notified of by “person A” under the terms of section GC 21(3) and “person B” under the terms of section GC 21(5).

Inland Revenue: severe weather conditions in Canterbury, Clutha and Southland

On 29 October 2025, Inland Revenue announced that taxpayers affected by severe weather in Canterbury, Clutha and Southland should get in touch via myIR including the word ‘weather’ or call Inland Revenue on their disaster line 0800 473 566.

Tax Information Bulletin: November 2025

On 3 November 2025, Inland Revenue issued TIB Vol 37, Nov 10 (November 2025):

New legislation

• Public Act 2025 No 50: Income Tax (FamilyBoost) Amendment Act 2025

Determination

• S65: Spreading method to be used for some electricity price contracts for difference

Standard practice statement

• Notice of withdrawal: Imaging of electronic storage media

Interpretation statement

• IS 25/21: GST – taxable activity

Case summary

• CSUM 25/12: High Court refuses to grant stay of liquidation pending outcome of judicial review proceeding

Technical decision summary

• TDS 25/23: Disposal of cryptoassets

Inland Revenue: Public Guidance Work programme

On 4 November 2025, Inland Revenue issued an updated Public Guidance Work Programme.

Inland Revenue: Auckland man sentenced for attempted multi-million-dollar COVID fraud

On 4 November 2025, Inland Revenue published details of a man sentenced to over four years in prison due to his involvement in orchestrating a large-scale fraud targeting the Covid-19 Wage Subsidy Scheme, the Small Business Cashflow Scheme, COVID-19 Support Payments and Resurgence Support Payments.

Product rulings: Ministry of Education bursary payments

On 6 November 2025, Inland Revenue issued the following product ruling:

• BR Prd 25/05: Ministry of Education
  The Arrangement is the payment of bursaries that Initial Teacher Education providers make to eligible student teachers under the School Onsite Training Programme.

• BR Prd 25/06: Ministry of Education
  The Arrangement is the payment of bursaries that the Ministry of Education makes to eligible student teachers under the Go Rural: Isolated Placements Fund.

Interpretation statement: GST – secondhand goods input tax deduction

On 11 November 2025, Inland Revenue issued 'IS 25/22: GST – Secondhand goods input tax deduction', discussing 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.

Interpretation statement: GST – meaning of payment

On 11 November 2025, Inland Revenue issued 'IS 25/23: GST – Meaning of payment.' This is relevant for determining time of supply, tax periods, and eligibility for input tax deductions. A payment can be made using money, property, services, promissory notes, bills of exchange, deposits, or by set-off against existing debts. It can also occur when funds are borrowed under a separate loan agreement and used to settle the supply obligation. However, simply deferring the purchase price under the supply agreement does not constitute payment. Payments to stakeholders are not considered payments until the supplier receives the funds or they are held solely for the supplier’s benefit. Accounting entries may provide evidence but are not determinative, and GST anti-avoidance rules may apply to artificial arrangements.

FDR Determination: Nuveen Global Sustainable Bond Fund – Class X NZD Distributing (H) share class

On 11 November 2025, Inland Revenue issued 'FDR 2025/05: Determination the fair dividend rate method may not be used to calculate FIF income by investors in the Nuveen Global Sustainable Bond Fund – Class X NZD Distributing (H) share class.'

Inland Revenue: Home detention for COVID scheme fraud

On 11 November 2025, Inland Revenue provided the details of a Northland woman sentenced to eight months home detention in consequence of making false applications for COVID-19 support.

Inland Revenue: overdue IR3 returns

On 12 November 2025, Inland Revenue announced that in November 2025 it had emailed around 70,000 taxpayers with overdue IR3 returns for the 2024 and/or 2025 tax years, excluding those with an extension until 31 March 2026 through tax agents. The campaign urges taxpayers to file promptly and warn of consequences such as default assessments, late filing penalties, and enforcement actions. While focusing on 2024 and 2025 returns, Inland Revenue will also encourage filing of earlier overdue returns.

Interpretation Statement: Income Tax – business activity

On 13 November 2025, Inland Revenue issued 'IS 25/25: Income tax – business activity.' This provided guidance on what constitutes a “business” for income tax purposes, when it starts or ceases, and its implications for taxable income and deductions. The interpretation relies on case law, notably 'Grieve v Commissioner of Inland Revenue', focusing on the nature of activities and genuine profit intention, with factors like scale, regularity, and resources considered. It distinguishes businesses from hobbies, notes that passive activities may qualify, and outlines indicators such as systematic operations and planning. The statement also explains when a business ceases and clarifies differences between the income tax and GST concepts.

Draft Interpretation Statement: payments by employers on the death of an employee to executors and family

On 14 November 2025, Inland Revenue issued 'PUB00470: Income tax – payments by employers on the death of an employee to executors and family'. The interpretation statement considers whether such payments are taxable, PAYE obligations for employers, deductibility of payments, and executors’ filing duties. Payments are generally taxable if they would have been income to the employee, with classification depending on whether they are employment income, pension income, or ordinary income. PAYE usually applies to most employer payments, and deductibility follows standard rules. Executors must file any outstanding returns for the deceased and, if required, estate returns.

The deadline for submissions is 30 January 2026.

Draft determination: Tax Depreciation Rate for battery energy storage systems

On 18 November 2025, Inland Revenue issued draft determination 'ED0266: Tax Depreciation Rate for battery energy storage systems', proposing a new asset class and provisional depreciation rate for Battery Energy Storage Systems used in power generation and national grid distribution. The rate will apply only to modular units and is effective for the 2025 and later income years.

The deadline for submission is 18 December 2025.

Inland Revenue: SBC Loan Scheme

On 18 November 2025, Inland Revenue announced that the SBC loan scheme will expire by 30 June 2026 for taxpayers with five-year loans. Inland Revenue will contact taxpayers whose loans end before that date, starting late November 2025 and February 2026, to address unpaid balances. Any remaining loan plus interest will become overdue debt, and default interest may apply. Inland Revenue will reach out to those behind on payments or in default and send reminder letters via myIR. These will not be redirected to tax agents.

Inland Revenue: employer and GST debt older than 12 months

On 19 November 2025, Inland Revenue announced that they have widened the target campaign to collect overdue debt and returns, particularly GST and employer debt. The campaign will include clients with debt older than 12 months. Inland Revenue’s Community Compliance team will be active in the community from late November through to mid-December.

Inland Revenue: man returns from Australia to face home detention sentence

On 20 November 2025, Inland Revenue provided the details of an Auckland company director sentenced to 11 months home detention for aiding and abetting his companies from failing to account for PAYE. The man voluntarily returned to New Zealand from Australia to avoid extradition. The amount not paid by the due date by the companies the man controlled was just under $1.4 million.

Inland Revenue: GST fraud results in prison sentence

On 21 November 2025, Inland Revenue provided the details of a Central Otago man sentenced to 23 months imprisonment for GST fraud.

Technical decision summaries

TDS: how does the business continuity test apply to a consolidated group? (Private Ruling)

On 28 October 2025, Inland Revenue published 'TDS 25/26: How does the business continuity test apply to a consolidated group?.' The case involved a parent company with three subsidiaries (Sub 1, Sub 2, and Sub 3) carrying forward tax losses, where Sub 1 and Sub 2 were profitable and Sub 3 had significant losses. The parent planned to sell Sub 3 after Sub 1 and Sub 2 exited the group, leaving Sub 3 as the sole member. The Tax Counsel Office considered whether Sub 3 could carry forward the group’s losses under section IB 3 and if the business activities of the exited entities were relevant. It decided that the consolidated group is treated as the company with the tax loss, the business continuity test focuses only on Sub 3’s activities, the activities of Sub 1 and Sub 2 are irrelevant, and section GB 3BA did not apply to the arrangement.

OECD updates

OECD releases new statistics on tax disputes

On 31 October 2025, the OECD released new statistics in Mutual Agreement Procedures (MAP) and Advanced Pricing Arrangements (APA) providing a comprehensive view of cross-border dispute resolution and prevention of double taxation. As part of the 2024 MPA and ACA awards on the 2025 OECD Tax Certainty Day, New Zealand received a reward for the shortest timing in closing non-Transfer Pricing cases (beating Australia who finished second) while Australia and New Zealand received the reward for the most efficient pair in joint case handling on non-Transfer Pricing cases. A preliminary version of the 2025 update of the Consolidated Information on Mutual Agreement Procedures was also released.

Effective Carbon Rates 2025

On 13 November 2025, the OECD published the Effective Carbon Rates 2025, which provides comparable data and insights into how 79 countries, accounting for 82% of global greenhouse gas (GHG) emissions, use carbon taxes, emissions trading systems (ETSs), and fuel excise taxes. Two key trends emerge from the latest data: carbon pricing policies are increasingly diverse and flexible to balance diverse policy objectives, and their adoption, particularly that of ETSs, continues to expand to new countries and more sectors.

Tax Administration 2025

On 17 November 2025, the OCED released the 2025 edition of the Tax Administration Series containing information on tax administration. This year’s edition focused on the 10-year perspective on the evolution of tax administration and how the rise of artificial intelligence is shaping the future of tax administration. The report covered a wide range of deployments of AI across tax administrations in various jurisdictions.

Update to the OECD Model Tax Conventions

On 19 November 2025, the OECD released its 2025 update to the Model Tax Convention, introducing changes for cross-border work arrangements, natural resource taxation, and technical adjustments for tax certainty and transfer pricing. Key updates include guidance on when an employee’s home can be a permanent establishment , an optional provision for natural resource extraction with a lower threshold, clarified rules on intra-group financial transactions and interest deductibility under Article 9, and expanded guidance on information exchange under Article 26. Additional technical changes were also made to the Convention and Commentary.

Plenary meeting of the OECD Forum on Tax Administration

From 18–20 November 2025, the OECD Forum on Tax Administration held its 18th Plenary in Cape Town with delegates from 49 jurisdictions, focusing on reducing tax gaps and compliance burdens. Key agreements included adopting digital technology to ease compliance, cooperating on tax debt reduction, supporting Global Minimum Tax implementation, and strengthening efforts to boost domestic resource mobilisation in developing countries.

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