Snapshot of recent developments

Tax legislation and policy announcements

FBT Prescribed Rate of Interest reduced

The Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations (No 3) 2025 were notified in the New Zealand Gazette on 27 November 2025 and came into force on 25 December 2025. The regulations amend the Income Tax (Fringe Benefit Tax, Interest on Loans) Regulations 1995 by reducing the rate of interest that applies for fringe benefit tax purposes to employment-related loans from 6.67% to 6.29%. The new rate applies for the quarter beginning on 1 October 2025 and for subsequent quarters.

On 10 December 2025, Inland Revenue published the associated Order in Council commentary.

Customs and Excise Goods Management Levies Order issued

The Customs and Excise (Goods Management Levies) Order 2025 was notified in the New Zealand Gazette on 27 November 2025 and comes into force on 1 April 2026, except for clause 16 (notification of levy rates) which came into force on 1 January 2026.

Customs and Excise Postal Articles Amendment Regulations issued

The Customs and Excise (Postal Articles) Amendment Regulations 2025 were notified in the New Zealand Gazette on 27 November 2025. The regulations came into force on 28 November 2025, except for regulation 7 (service fee for exported UPU mail) which comes into force on 1 April 2026.

Inland Revenue: Submissions on Inland Revenue’s draft long-term insights briefing

On 1 December 2025, Inland Revenue released all submissions on the draft on its long-term insights briefing (LTIB), Stable bases and flexible rates: New Zealand’s tax system.

Most Favoured Nation Clause on interest activated on tax treaty between New Zealand and Chile

On 3 December 2025, the Chilean tax administration published Circular No. 65/2025 confirming that the conditions for activation of the Most Favoured Nation clause on interest in the Chile - New Zealand Income Tax Treaty (2003) have been met.

New Zealand-Fiji double tax agreement review

On 8 December 2025, the first round of negotiations between the Inland Revenue and the Fiji Revenue Customs Service (FRCS) commenced to review the double tax agreement between the countries. The negotiation was formally opened by the Commissioner of Inland Revenue.

Use of Money Interest rates decrease

On 8 December 2025, The Taxation (Use of Money Interest Rates) Amendment Regulations (No 2) 2025 Order in Council was passed. The new rates came into force on 16 January 2026. The taxpayer’s paying rate of interest on underpaid tax decreases from 9.89% to 8.97% per annum. The paying rate of interest on overpaid tax is decreased from 3.27% to 2.25% per annum.

Targeted policy consultation on not-for-profits

On 15 December 2025, Inland Revenue Policy published further information on the targeted consultation in relation to not-for-profits.

Tax Administration (Extension of application deadline for Research and Development Tax Credits) Order 2025

On 23 December 2025, Inland Revenue issued SL 2025/259. This Order in Council extends Research & Development tax Incentive (RDTI) general approval due date for businesses with a September balance date for the 2024–25 income year. The extension changed the due date from the last day of the third month after the end of the income year (31 December 2025) to 15 January following the end of the income year (15 January 2026).

Inland Revenue statements and guidance

Product Ruling: Breeding Bloodstock and the sale of progeny

On 24 October 2025, Inland Revenue issued BR Prd: 25/07. This product ruling sets out the Commissioner of Inland Revenue’s view on the income tax treatment of a bloodstock lease‑to‑purchase arrangement offered by New Zealand Bloodstock Finance and Leasing Limited. The ruling applies for the period 24 October 2025 to 31 March 2031 and is binding on the Commissioner of Inland Revenue for taxpayers who enter into the arrangement as described.

Inland Revenue: High-priced bloodstock yearlings at Karaka or Christchurch 2026 eligible for tax deductions

On 28 November 2025, Inland Revenue announced that new investors who purchase high-priced yearlings (thoroughbred and standardbred) with the intention of breeding for profit, will be able to claim income tax deductions as if they were operating an existing bloodstock breeding business. However, if the yearling is later sold, any profit from that sale will be subject to income tax.

Tax Information Bulletin: December 2025

On 1 December 2025, Inland Revenue issued TIB Vol 27, No 11 (December 2025):

Determination

• FDR 2025/06: 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

Binding Rulings

• BR Prd 25/05: Ministry of Education
• BR Prd 25/06: Ministry of Education

Interpretation statements

• IS 25/22: GST – Secondhand goods input tax deduction 
• IS 25/23: GST – Meaning of payment
• IS 25/24: Income tax and GST – industries other than forestry registered in the Emissions Trading Scheme
• IS 25/25: Income tax – business activity

Question we’ve been asked

• QB 25/21: Income tax – Public private partnership projects and business continuity test for losses

Technical decision summaries

• TDS 25/24: The supply of accommodation in a serviced apartment
• TDS 25/25: Restructure and transfer of shares
• TDS 25/26: How does the business continuity test apply to a consolidated group?

Public Guidance Work Programme 2025-26 (December 2025)

On 8 December 2025, Inland Revenue updated the current Public Guidance Work Programme for 2025-25.

Inland Revenue: Tax agents survey results July – September 2025

On 9 December 2025, Inland Revenue released the results of the tax agents survey for the period of July-September 2025.

Inland Revenue: Accounting for cyber security incidents

On 10 December 2025, Inland Revenue announced that there has been a significant rise in business email compromise (BEC) targeting tax agents. In these cyber-attacks, a staff member’s email account is taken over and used to send convincing emails to colleagues or external contacts. The emails often contain malicious links or requests for money or sensitive information.

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

On 11 December 2025, Inland Revenue released PUB00522: GST financial services – Services supplied in relation to retirement schemes. The consultation considers how GST applies to services provided by a retirement scheme’s manager to the scheme, and by outsourced third-party providers to that manager, focusing on whether those services qualify as exempt financial services under s 14(1)(a) of the Goods and Services Tax Act. In particular, it addresses the meaning of “management of a retirement scheme”, whether outsourced providers can be supplying management services, and whether they can make exempt financial services supplies outside s 3(1)(j).

Submissions close on 27 February 2026.

Inland Revenue - Question we’ve been asked: Do the purchase price allocation rules alter the tax book values of Farmland Improvements and listed horticultural plants under subpart DO?

On 15 December 2025, Inland Revenue published QB 25/22 Do the purchase price allocation rules alter the tax book values of Farmland Improvements and listed horticultural plants under subpart DO? Under subpart DO, a purchaser of farmland with Farmland Improvements and listed horticultural plants who carries on a farming business on the land is allowed an annual amortisation deduction of the diminished values of the improvements and plants. This publication considers whether the purchase price allocation rules alter this treatment. It concludes they do not.

Draft Interpretation Statement: GST treatment of short-stay accommodation

On 15 December 2025, Inland Revenue published PUB00477 GST treatment of short-stay accommodation and accompanying factsheet Should I register for GST if I provide short-stay accommodation. The draft Interpretation Statement updates IS 20/04 and QB 19/09. The draft Interpretation Statement discusses the GST treatment of short-stay accommodation provided by hosts either through an electronic marketplace or directly to guests.

The deadline for submission is 16 February 2026.

Inland Revenue: Near maximum home detention sentence for unpaid tax

On 17 December 2025, Inland Revenue published details of director who’s companies failed to pay PAYE that was deducted from employee’s salaries to Inland Revenue, totalling close to $1m. He also claimed more than $250,000 from COVID-19 relief schemes. The man, who was bankrupted in May 2022, was sentenced to 11 months home detention, to be served at his $7m property. 

Inland Revenue: Planned system outage in March 2026

On 17 December 2025, Inland Revenue announced that they are planning a system update over the weekend of Saturday 14 and Sunday 15 March 2026. This is to prepare for changes coming into effect on or before 1 April 2026. Online services including myIR, SPK2IR and gateway services. More details will be provided closer to time.

Draft Interpretation Statement: GST – Court-award costs and disbursements 

On 19 December 2025, Inland Revenue published PUB00516 GST: Court-awarded costs and disbursements for consultation. The draft Interpretation Statement considers whether court-awarded costs, disbursements and out-of-court settlement payments for costs and disbursements are subject to GST. This statement does not consider the GST treatment of court awards and out-of-court settlement payments more generally (e.g. payments of damages).

Submission close 20 February 2026.

Inland Revenue Prosecution Guidelines – Commissioner’s Statement

On 19 December 2025, Inland Revenue published CS 26/01: Inland Revenue Prosecution Guidelines. It set out how Inland Revenue will conduct its prosecution activity, subject to the Solicitor General’s Prosecution Guidelines. The statement confirms Inland Revenue’s prosecution function as a targeted enforcement tool applied only after other compliance responses have been assessed as inadequate.

Interpretation Statement: The Commissioner’s duty of care and management – section 6A of the Tax Administration Act 1994

On 23 December 2025, Inland Revenue published IS 25/26: The Commissioner’s duty of care and management – section 6A of the Tax Administration Act 1994. The statement sets out the Commissioner of Inland Revenue’s “care and management” duty under section 6A of the Tax Administration Act 1994 and how it operates alongside other statutory duties, particularly regarding s 6 (protecting the integrity of the tax system).

Inland Revenue: Overviews – Gifting

On 7 January 2026, Inland Revenue updated their Tax Technical website Overviews page on gifting which includes links to Inland Revenue guidance on gifting in relation Income tax and GST.

Inland Revenue: 2026 Child support payments – receiving carers

On 12 January 2026, Inland Revenue announced that those expecting child support payments from Inland Revenue should expect to receive them by the 21^st of each month, unless the 20^th falls on a weekend.

Inland Revenue: Final year Fees Free

From 15 January 2026, eligible learners can apply through myIR for Final‑year Fees Free, reimbursing up to $12,000 for the final year of tertiary study or final two years of Level 3+ work‑based learning. Fees Free is non‑taxable and does not affect Working for Families or Child Support. It replaces the first‑year Fees Free scheme, and learners who used first‑year Fees Free are not eligible.

Inland Revenue: New reporting rules for crypto-asset service providers

On 20 January 2026, Inland Revenue published details of New Zealand’s adoption of the Crypto-Asset Reporting Framework (CARF) developed by the OECD. This international exchange framework will increase the visibility of activities in the crypto-asset sector. New Zealand based RCASPs (Reporting Crypto-Asset Service Providers – any individual or entity carrying out the exchange or conversion of crypto-assets on behalf of users as a business, including those serving as a counterparty, intermediary or providing a trading platform) are required to collect the required information from 1 April 2026 with the first reporting due by 30 June 2027. More information on the Crypto-Asset Reporting Framework can be found here. Any questions on the framework can be sent to Inland Revenue at CARF@ird.govt.nz.

Inland Revenue: Overdue EMP and GST debt and returns

On 20 January 2026, Inland Revenue announced their continued focus on collection of overdue debt and returns, with a focus on GST and employer (EMP) debt.

The focus is taxpayers with debt who have been through a full billing cycle but not yet responded to Inland Revenue. If further attempts to contact do not lead to a positive outcome, Inland Revenue may take the following actions:

• A visit to the taxpayer
• A bank deduction
• Other enforcement action (including bankruptcy or liquidation).

Client’s debt can be managed through myIR.

Inland Revenue: Registering new business tax accounts

On 22 January 2026, Inland Revenue updated the way registrations for certain new business tax account types in myIR with account types being separated into logical groups that can be found in the Intermediary Centre under client registration/register client for international exchange of information account. The account types affected are:  

• CBC – Country by Country Reporting
• DPI – Digital Platform Information
• FATCA – Foreign Account Tax Compliance Act
• CRS – Common Reporting Standard.

Inland Revenue: Severe weather conditions in Northland, Bay of Plenty, Tairāwhiti, Thames-Coromandel and Hauraki

On 27 January 2026, Inland Revenue reminded taxpayers that if they have been affected by the severe weather conditions, they do not need to contact Inland Revenue right now and should focus on recovering from the damage caused. Inland Revenue may be able to help with a number of areas including under the income equalisation scheme.

Inland Revenue: Changes to Best Start from 1 April 2026

On 29 January 2026, Inland Revenue reminded that, as announced in Budget 2025, Best Start payments for children born on or after 1 April 2026 will be means tested, payments reducing if a household’s annual income exceeds $79,000 and stopped if income exceeds $97,000. This change does not affect payments for children born before 1 April 2026.

International updates

New Zealand DTAs now available

The following recently signed tax treaties are now available:

• Croatia: New Zealand-Croatia DTA
• Iceland: New Zealand-Iceland DTA

Australia: When and how the Pillar Two rules apply

On 17 December 2025, the ATO updated its online guidance on how the Pillar Two global and domestic minimum tax rules work and when and who they apply to.

Australia: A New Tax System (Wine Equalisation Tax) (New Zealand Producer Rebate Claim Lodgment) Determination 2026

On 28 January 2026, the ATO published A New Tax System (Wine Equalisation Tax) (New Zealand Producer Rebate Claim Lodgment) Determination 2026. It sets out the rules for when New Zealand wine producers can lodge claims for the wine equalisation tax producer rebate as a wine tax credit.

OECD updates

Release of OECD Corporate Tax Statistics

On 25 November 2025, the OECD released the 2025 edition of OECD Corporate Tax Statistics that highlight an increase in corporate tax revenues on average across 131 jurisdictions. The report also showed a continued stabilisation of corporate tax rates, with the average combined statutory corporate income tax rate remaining at about 21% across Inclusive Framework jurisdictions. R&D tax reliefs have also stabilised.

OECD Public Consultation on the Global Mobility of Individuals

On 26 November 2025, the OECD/G20 Inclusive Framework issued a public consultation document on the global mobility of individuals. The consultation paper considers the tax issues generated by remote workers working overseas. The paper focuses on tax issues related to personal income tax and employment income. It also looks at challenges with respect to corporate income tax such as PE issues, profit attribution to PEs, residence questions, and transfer pricing. The consultation is seeking additional input, evidence and experience to support the Inclusive Framework in understanding the issues. The submission deadline closed on 22 December 2025.

Joint Statement for the automatic exchange of information on immovable property

On 4 December 2025, 25 jurisdictions including New Zealand announced their intention to join the OECD's new tax transparency initiative – the Multilateral Competent Authority Agreement on the Automatic Exchange of Readily Available Information on Immovable Property (IPI MCAA) – by 2029 or 2030.

Public Trust in Tax 2025: Asia and Beyond

On 4 December 2025, the OECD published Public Trust in Tax 2025: Asia and Beyond. The report provides insights into public perceptions on tax, and public trust in tax systems from 29 countries, primarily in Asia, but also from Latin America, Western Europe and the Pacific.

International community meets to reflect on latest advances in global tax transparency

On 2-4 December, the Global Forum on Transparency and Exchange of Information for Tax Purposes held its 18^th Plenary meeting in New Delhi, India.

Several key publications were launched:

• The Global Forum Annual Report, presenting the latest impact results and a detailed overview on capacity- building, monitoring and peer-reviewing activities.
• The 2025 Update of the Peer Review of the Automatic Exchange of Information (AEOI) on Financial Accounts, summarising the latest assessments of jurisdictions’ legal frameworks put in place to implement the AEOI standard on financial accounts and their effectiveness in practice.
• The Crypto-Asset Reporting Framework (CARF) Monitoring and Implementation Update, setting out progress on commitments and implementation of the CARF framework providing for the automatic exchange of tax relevant information on crypto-assets.
• The Information Security Management Maturity Assessments 2025, presenting the work carried out under a dedicated capacity-building initiative aimed at assisting developing countries in engaging in AEIO.

Labour taxes drive OECD tax revenues to record high in 2024

On 9 December 2025, OECD published the Revenue Statistics 2025 that showed higher revenues from labour taxes drove tax revenues among OECD countries to their highest-ever level 2024. The average tax-to GDP ratio across countries reached 34.1% of GDP in 2024. New Zealand is among the 13 countries whose tax-to-GDP ratio has declined (33.7% to 32.9%).

Report: Digital Continuous Transactional Reporting for Value Added Tax

On 10 January 2026, the OECD published their report on Digital Continuous Transactional Reporting for Value Added Tax. This report examines the design and operation aspects of digital continuous transactional reporting (DCTR) regimes for value added tax (VAT).

Guatemala joins the Inclusive Framework on BEPS

On 12 January 2026, The OECD announced that Guatemala has become the 148^th jurisdiction to join the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting.

Global Mobility of Individuals consultation comments published

On 14 January 2026, the OECD published the comments received on its global mobility of individuals consultation. The replay of the OECD’s public meeting on the Global mobility of individuals consultation can be found here.

Fiji joins Multilateral Convention to tackle tax evasion and avoidance

On 15 January 2026, Fiji signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. With Fiji’s signing, participation rises to 152 jurisdictions.

Sixth meeting of the OECD Global Forum on VAT

On 26-28 January 2026, the sixth meeting of the OECD Global Forum on VAT was held in Paris.

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