Snapshot of recent developments

Tax legislation and Policy Announcements

Public Remedials Log update: April and May 2026

The Public Remedials Log has recently been updated to include changes to legislation that have been enacted, as well as remedial submissions that have been accepted and are progressing towards being included in a future Bill.

Inland Revenue Technical Updates

Question We’ve Been Asked: Income tax – portfolio investment entity income from land development activities

On 26 May 2026, Inland Revenue published question we’ve been asked QB 26/03: Income tax – portfolio investment entity income from land development activities. The QWBA confirms that income derived from developing land, dividing it into lots and/or erecting buildings on the land for the purpose of sale is eligible income for a portfolio investment entity under s HM 12 of the Income Tax Act 2007. The draft QWBA was discussed in our March 2026 Tax Alert.

Determination: Income Tax (National Average Market Values of Specified Livestock) 2026

On 28 May 2026, Inland Revenue published determination NAMV 2026: Income Tax (National Average Market Values of Specified Livestock) Determination 2026. The determination establishes the national average market value (NAMV) of specified livestock for 2026 and entered into force on 29 May 2026.

Inland Revenue: Tax Information Bulletin – June 2026 (Vol 38, No 5)

On 2 June 2026, Inland Revenue issued its June 2026 Tax Information Bulletin. The Tax Information Bulletin covers the following recent tax developments:

Act commentary

• Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026

Determinations

• DET 26/03: Declaration that the Wellington severe weather event in April 2026 is an emergency event for the purpose of family scheme income.
• DET 26/04: Tax Administration (Deemed Rate of Return on Attributing Interest in Foreign Investment Funds, 2025-26 Income Year) Determination 2026.
• NAMV 2026: Income Tax (National Average Market Values of Specified Livestock) Determination 2026.

Ruling

• BR Prd 26/08: Kiwibank Limited

Interpretation statement

• IS 26/11: GST – Court-awarded costs and disbursements.

Commissioner’s statement

• CS 26/02: GST treatment of low value pre-registration acquired goods and services.

QWBA

• QB 26/02: When does the fringe benefit tax exclusion for benefits relating to health or safety apply?
• QB 26/03: Income tax – portfolio investment entity income from land development activities.

Technical decision summary

• TDS 26/04: Off-market share cancellation
• TDS 26/05: Off-market share cancellation
• TDS 26/06: Living trust, bare trust, distributions

Interpretation Statement: Working for Families Tax Credits and family scheme income

On 18 June 2026, Inland Revenue published Interpretation Statement IS 26/12: Working for Families tax credits and family scheme income and an accompanying fact sheet. The Statement gives an overview of eligibility for Working for Families Tax Credits and discusses the adjustments required to a person’s net income to determine family scheme income. Inland Revenue will publish a revised statement incorporating the Working for Families changes recently announced in the 2026 Budget on or before 1 April 2027, when the enacted changes take effect.

2026 CPI adjustment to Operational Statements and Determinations

On 18 June 2026, Inland Revenue issued CPI adjustments to Operational Statements and Determinations which provide the following standard rates for the 2026 income year:

• OS 19/03 (CPI 2026): The square metre rate for the dual use of premises is $57.30.
• DET 19/02 (CPI 2026): The daily standard-cost of household service (per guest) for short-stay accommodation is:
  • $65.00 for owned dwellings; and
  • $59.00 for rented dwellings.
• DET 19/01 (CPI 2026): The standard weekly cost (per boarder) for household boarding service providers is $245.00.
• DET 09/02 (CPI 2026): The standard-cost household service for childcare providers is:
  • $4.70 hourly standard cost (per child); and
  • $460.00 annual fixed administration and record keeping standard cost.

Tax Cases and Technical Decision Summaries

Case Summary: Taxpayer’s judicial review of the TCRA’s unless order successful

On 5 May 2026, Inland Revenue issued case summary CSUM 26/04: Taxpayer’s judicial review of the TCRA’s unless order successful. This case concerned a taxpayer whose tax challenge was struck out after they failed to comply with an “unless order” issued by the Taxation Review Authority (TRA). The taxpayer sought judicial review, arguing that the process was unfair. The High Court agreed, finding that the TRA made procedural errors by providing for the order to be sealed without notice and by striking out the proceedings without first giving the taxpayer an opportunity to explain or seek relief from their breach. The Court set aside the strike-out decision and allowed the taxpayer to apply to the TRA for relief.

Product Ruling: Kiwibank Limited

On 20 May 2026, Inland Revenue published BR Prd 26/08: Kiwibank Limited. The product relates to the Kiwibank Offset Mortgage, which is a loan feature that allows a borrower’s home loan (or eligible term loan) balance to be offset against the aggregate credit balances of selected bank accounts held by the borrower and/or certain eligible related persons (such as spouses, parents, or children). Interest is not calculated on the gross loan balance but instead on a net notional balance, being the loan balance reduced by the credit balances of up to eight linked accounts. This offsetting mechanism reduces the interest payable and increases the proportion of repayments applied to principal.

The product was held to be compliant with various provisions of the Income Tax Act 2007, subject to the conditions that all interest rates relating to the product are arm’s length market interest rates and the offset ratio applied to credit account balances does not exceed one.

Case Summary: Costs awarded to Commissioner as successful party – no basis for a reduction

On 25 May 2026, Inland Revenue issued case summary CSUM 26/05: Costs awarded to Commissioner as successful party – no basis for a reduction. This case concerned a dispute over legal costs following the unsuccessful appeal of tax assessments and evasion shortfall penalties. After the Commissioner successfully defended the appeal, the taxpayer argued that the Commissioner had only achieved partial success and that the costs award should be reduced. The High Court rejected that argument, finding that the taxpayer had been comprehensively unsuccessful on the matters in issue. The Court therefore awarded the Commissioner full scale costs, including higher band C costs, the costs of preparing the common bundle of documents, and the costs of engaging a second counsel.

Technical Decision Summary: Living trust, bare trust, distributions

On 29 May 2026, Inland Revenue published technical decision summary TDS 26/06: Living trust, bare trust, distributions. The Technical Decision Summary summarises a private ruling that considered the proposed amendment to a living trust deed and the later distribution of the trust’s assets to one of the specified beneficiaries when the last of the trustors dies.

An overseas trust was established by grandparents who retained complete control over the trust assets during their lifetimes, including the ability to revoke or amend the trust and access all its income and capital. The Commissioner concluded that, because of this level of control, the arrangement was not treated as a valid trust for New Zealand tax purposes while either grandparent was alive. Once the last surviving grandparent died, however, the arrangement became a bare trust, with the beneficiaries effectively treated as owning the assets directly. As a result, transfers of the assets to the beneficiaries were not treated as taxable distributions from a foreign trust and were not subject to New Zealand income tax.

Case Summary: High Court allows leave to appeal and orders backdating of charities reregistration

On 24 June 2026, Inland Revenue issued case summary CSUM 26/06: High Court allows leave to appeal and orders backdating of charities reregistration. This case concerned a charitable entity that was deregistered after repeatedly failing to file its annual returns and later sought to challenge both the deregistration and the limited backdating of its re-registration. The Court refused to allow a late appeal against the deregistration, finding that the delay was substantial, unexplained, and that the deregistration was justified given the ongoing non-compliance.

However, the Court allowed a late appeal against the backdating decision and concluded that the charity’s re-registration should be backdated further because it had continued to meet the substantive requirements for charitable status. To prevent disproportionate tax consequences arising from the deregistration, the Court ordered the re-registration to be backdated, subject to the charity filing all outstanding returns within a specified timeframe.

Inland Revenue Media Releases and Other Updates

Inland Revenue: Fees Free will finish at the end of 2026

On 28 May 2026, Inland Revenue issued a reminder that the Fees Free scheme for the final year of tertiary study and the final two years of work-based learning will end in 2026. Qualifications and programmes ending after 31 December 2026 will cease to be eligible.

Inland Revenue: Tax agents survey results – (Jan-Mar 2026)

On 2 June 2026, Inland Revenue published the results of its Tax Agents Voice of the Customer (TAVOC) survey for January to March 2026. 94% of tax agents reported overall satisfaction with Inland Revenue, 89% reported that they trust Inland Revenue, and 90% reported finding information and process checks at least somewhat easy to comply with.

Inland Revenue: Changes to how taxpayer ruling applications are submitted

On 10 June 2026, Inland Revenue advised that from September 2026 there will be an updated process for submitting private, product and status ruling applications to support how taxpayer rulings are requested and managed. Importantly, taxpayer ruling applications (including requests for pre-lodgement meetings), will have to be submitted through myIR.

Inland Revenue: Individual income tax assessments - More information request letters

On 16 June 2026, Inland Revenue announced that they will be sending out letters to taxpayers seeking more information regarding their individual income tax assessments until the end of July. For taxpayers without an extension of time, the assessment must be completed within 45 days from the date that the letter is issued. Taxpayers with an extension of time have until 31 March 2027 to respond to the assessment.

Inland Revenue: Working with Baycorp to collect overdue tax debt

On 16 June 2026, Inland Revenue announced that Baycorp will contact some taxpayers with debt that has been overdue for more than 6 months by phone, email, SMS or letter. Baycorp acts on behalf of Inland Revenue to contact and engage with taxpayers with outstanding debt, but all debt repayments must still be made directly to Inland Revenue.

Inland Revenue: Online Gambling Duty (OGD)

On 16 June 2026, Inland Revenue announced that from 1 May 2026 the Offshore Gambling Duty will be renamed to the Online Gambling Duty (OGD).

Inland Revenue: Protecting your myIR account and client information

On 17 June 2026, Inland Revenue warned that there have been an increasing number of attempts to gain unauthorized access to tax agent myIR accounts, by malicious links which install malware onto the user’s device.

Inland Revenue: Paid parental leave

On 23 June 2026, Inland Revenue announced that from 1 July 2026, eligible employees and self-employed people will have an increase in the parental leave payment from $788.66 to $811.05 per week before tax. The minimum rate for self-employed people will increase from $235 to $239.50 per week.

International Tax updates

Australian Draft Determination: Wine Equalisation Tax - New Zealand Producer Rebate Foreign Exchange Conversion

On 25 May 2026, the Australian Deputy Commissioner of Taxation published draft determination A New Tax System (Wine Equalisation Tax) (New Zealand Producer Rebate Foreign Exchange Conversion) Determination 2026. The Determination applies to eligible NZ wine producers and prescribes how a component of the approved selling price of wine denominated in a foreign currency should be converted to AUD. Once finalised, the Determination will repeal and replace the Wine Equalisation Tax New Zealand Producer Rebate Foreign Exchange Determination (No. 57) 2016.

OECD updates

GloBE Consolidated Commentary update: tax challenges arising from the digitalisation of the economy

On 28 May 2026, the OECD published updated Consolidated Commentary for the GloBE rules. The updated Commentary incorporates Agreed Administrative Guidance that has been released by the Inclusive Framework from March 2022 through January 2026.

The impact of population ageing on tax revenues in OECD countries

On 2 June 2026, the OECD published their working paper The impact of population ageing on tax revenues in OECD countries. The working paper examines the potential effects of demographic change on tax systems by analysing the distribution of tax bases across age groups and assessing the impact of ageing. It also explores how tax design may further exacerbate revenue pressures.

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