Snapshot of recent developments

Tax legislation and policy announcements

Public Policy Remedials Log (August 2025)

The Public Policy Remedials Log has been updated for August 2025, noting remedial amendments included in the Taxation (Annual Rates for 2025-26, Compliance Simplification, and Remedial Measures) Bill.

Memorandum of Arrangement implementing Multilateral Convention Arbitration process under New Zealand/Australia Double Tax Agreement enters into force

On 2 September 2025, Australia and New Zealand signed a memorandum of arrangement to establish the mode of application of the arbitration process provided for in Part VI (Arbitration) of the OECD Multilateral Convention (2017), under article 25 of the Australia - New Zealand Double Tax Agreement, as modified by article 16 (Mutual Agreement Procedure) and paragraph 10 of article 19 (Mandatory Binding Arbitration) of the Multilateral Convention.

Information release: Budget 2025

On 4 September 2025, Treasury released its Information Release for Budget 2025. Of note is a Tax Policy Report on the Detailed design of Investment Boost.

Budget 2025 - information release

On 8 September 2025, Inland Revenue issued its information release and further information release for Budget 2025

Taxation Bill passes First Reading

On 11 September 2025, the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill passed its First Reading. It has now been referred to the Finance and Expenditure Committee who are accepting submissions until 23 October 2025.

FamilyBoost Amendment Bill introduced

On 16 September 2025, the Minister of Finance introduced the Income Tax (FamilyBoost) Amendment Bill into the House.

The Bill proposes to increase the level of assistance available through the FamilyBoost scheme by:

• increasing the percentage of early childhood education expenses claimable from 25% to 40%, raising the maximum quarterly tax credit payment from $975 to $1,560; and
• reducing the abatement rate from 9.75% to 7%, increasing the quarterly maximum household income cap from $45,000 to $57,286 (equivalent to $180,000 to $229,144 annual household income).

For more information see:

• Bill as introduced
• Bill commentary 
• Regulatory Impact Statement 
• Disclosure Statement

The Bill passed all stages of the legislative process under urgency and received Royal Assent on 23 September 2025.

Inland Revenue statements and guidance

Product Ruling: PPS Mutual Limited

On 30 June 2025, Inland Revenue issued BR Prd 25/04: PPS Mutual Limited. The Product Ruling applies to profit share benefit allocations and payments to Members (or Members’ estates) under the death benefit, terminal illness benefit and maturity benefit provided for in the PPS Mutual Profit Share Benefit Multiple Life Policy. It applies from 30 June 2025 and expires on 29 June 2028.

Inland Revenue: Income Tax (Deemed Rate of Return on Attributing Interests in Foreign Investment Funds, 2024-25 Income Year) Order 2025

On 25 August 2025, Inland Revenue published the Order in Council commentary providing information on a change in the deemed rate of return for taxing interests in Foreign Investment Funds, effective from 1 April 2025.  The new rate is 8.04%.

Inland Revenue: Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations (No 2) 2025

On 25 August 2025, Inland Revenue published the Order in Council commentary providing information on a decrease to the FBT prescribed rate of interest for low-interest employment-related loans, applying from 1 July 2025. The new rate is 6.67%. 

Inland Revenue: Tax Information Bulletin Vol 37 No 8 September 2025

On 1 September 2025, Inland Revenue published the September 2025 Tax Information Bulletin:

Determination

• FDR 2025/05: Determination the fair dividend rate method may not be used to calculate FIF income by investors in the iShares Global Aggregate Bond ESG SRI UCITS ETF – EUR hedged (Accumulating) share class

Interpretation statement

• IS 25/18: Income tax – Whether money or property received by New Zealand tax residents from overseas is income from a foreign trust

QWBA

• QB 25/18: Does GST apply to a deposit the seller retains in a cancelled land sale agreement?
• QB 25/19: GST listed services rules: When is a supply of listed services made through an electronic marketplace?
• QB 25/20: GST listed services rules: How do the rules apply when there is a supply of listed services and other goods or services?

Technical decision summary

• TDS 25/17: Application of schedular payment rules
• TDS 25/18: Sale of intellectual property, shares and ongoing provision of services
• TDS 25/19: Company restructure for commercial and estate planning
• TDS 25/20: Transfer of property between charitable trusts

Operational position: Commissioner’s operational position on the FBT treatment of open loop cards provided by employers to employees

On 8 September 2025, Inland Revenue published OP 25/02 Commissioner’s operational position on the FBT treatment of open loop cards provided by employers to employees. This operational position is in relation to QWBA 25/07 What is the income tax treatment of gift cards and products provided as trade rebates or promotions? The QWBA stated that the Commissioner of Inland Revenue’s view of the correct tax treatment for when an employer provided an open loop card to an employee was that the employer should gross up the face value of the open loop card and return PAYE on that amount. During the consultation it was determined that most employers treated open loop cards as being subject to FBT. As a result, the QWBA stated that the Commissioner would not be applying resources to correct previous tax positions taken in return periods ending on or before the date of the QWBA.

Since the QWBA was published, Parliament has proposed amendments (in the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill) to allow open loop cards to be treated as a fringe benefit. The amendments will be retrospective.

The Commissioner recognises that immediate implementation of the position outlined in the QWBA would be difficult for employers for tax positions taken after the date of issue of the QWBA and before amendment of the law. This is due to required changes to, for example, computer systems, payroll systems and accounting records. The Commissioner also notes that such changes would only be required for a short time given the amendment’s retrospective effect.

Therefore, the Commissioner of Inland Revenue will also not apply resources to determining whether an employer taxpayer has applied the position outlined in the QWBA correctly for the PAYE periods that cover 1 April 2025 to 31 March 2026. This position only applies where the employer has returned fringe benefit tax on the provision of open loop cards during this period.

Inland Revenue: Tax agents survey results - 2024/25 financial year

On 2 September 2025, Inland Revenue released the results of the tax agents survey results for the 2024/25 financial year.

Inland Revenue: Bright-line test overview

On 2 September 2025, Inland Revenue advised there is now an overview of public guidance on the bright-line test on the Inland Revenue Tax Technical website, organised by:

• General guidance for common situations
• Exclusions from the bright-line test and rollover relief
• Transactions involving different types of entities
• Specific scenarios
• Technical decision summaries

Inland Revenue: Interest and RWT disbursement – income equalisation (EQU) periods

On 3 September 2025, Inland Revenue announced that as part of the reserve scheme upgrade in March 2025, interest on previous withdrawals will be recalculated.

Inland Revenue: Tax agent annual reviews and account manager service

On 3 September 2025, Inland Revenue announced it is changing work priorities and adapting the way they engage with tax agents and other intermediaries. This year, the annual reviews for intermediaries will be on hold from September to December, however copies of Authorities to Act may still be requested.

IS: Student loans – Overseas borrowers and their obligations

On 15 September 2025, Inland Revenue published IS 25/20 Student Loans – Overseas borrowers and their obligations. The IS discusses when a student loan borrower will be a NZ-based borrower and when they will be an overseas-based borrower, which will determine whether interest accrues on their loan and will impact their repayment obligations.

Inland Revenue: Tax fraud adds nine months to prison time

On 15 September 2025, Inland Revenue published the details of a Christchurch man who had nine months added to his prison sentence for tax fraud. The charges related to fraudulently obtaining (and attempting to obtain) income tax refunds, student loan payments and Working for Families payments.

Inland Revenue: Distributing beneficiary income from an Estate or trust return - IR6

On 16 September 2025, Inland Revenue clarified how to use tax credits, attached to income paid or allocated to a beneficiary, when filing an Estate or trust return – IR6.

Inland Revenue: 2025 Child support payments - receiving carers

On 18 September 2025, Inland Revenue updated the dates where those who receive child support will receive payments from Inland Revenue.

Inland Revenue: Update to the Investment Boost Webpage

On 24 September 2025, Inland Revenue advised that the Investment Boost webpage has been updated to include examples (particularly around the available for use test).

Inland Revenue: Pukekohe woman sentenced on tax evasion

On 24 September 2025, Inland Revenue published the details of a Pukekohe woman who ran a business supplying workers to harvest fruit and vegetables for growers who was sentenced to home detention for tax evasion (aiding and abetting a company evade tax). The woman had evaded $1.5m in GST, PAYE, and income tax. The offending was repetitive and pre-meditated, with income tax returns not filed for four consecutive years, GST returns either not filed or false returns filed over a three-year period, and PAYE returns not filed over a 40-month period.

Inland Revenue: Easier process for IRD numbers and tax agent service retiring

On 24 September 2025, Inland Revenue announced they are making it easier to apply for an individual IRD number. From 6 October 2025 there will be new versions of the IR595 and IR742: 

• IR595 IRD number application – currently in New Zealand
• IR742 IRD number application – offshore individual.

These changes are for individual IRD number applications only.

Inland Revenue: Wind event in western Bay of Plenty

On 26 September 2025, Inland Revenue asked those affected by the wind event that occurred earlier in September in the western Bay of Plenty to contact Inland Revenue if they require assistance from Inland Revenue in relation to themselves, their family, business or (for tax agents) a client.

Inland Revenue: Pillar 2 registration and filing

On 26 September 2025, Inland Revenue launched its Pillar 2 Registration webpage with details on registration and filing requirements including:

• When an MNE group must register
• Single registration for each MNE group
• Registration and notification process
• Tax agent linking

Inland Revenue have also launched its Pillar 2 Filing webpage with details on:

• When to file the 1st year return
• Filing the GIR in another jurisdiction
• Exchanges of the GIR
• Multinational top-up tax return

Inland Revenue: Probate threshold increase

On 29 September 2025, Inland Revenue advised that there has been an increase to probate thresholds from $15,000 to $40,000 effective from 24 September 2025. Increasing the threshold lets families access assets of less than $40,000 without going through the High Court process of applying for probate.

Technical decision summaries

TDS: GST – supply of accommodation (Private Ruling)

On 4 September 2025, Inland Revenue issued TDS 25/22: GST – supply of accommodation. The Tax Counsel Office confirmed that a planned residential accommodation building with over 100 self-contained rooms and extensive shared facilities (e.g. kitchens, lounges, reception, cleaning, concierge) qualifies as a “commercial dwelling” under the GST Act 1985. This means the supply of accommodation is not exempt from GST, and the applicant—who is GST-registered and carrying on a taxable activity—is entitled to full input tax deductions for GST incurred during the building’s construction and ongoing operation. The ruling emphasised the building’s similarity to a boarding house and other commercial accommodation types due to its scale, services, and short-to-medium-term occupancy model.

Deloitte Global updates

Deloitte Insights article 

The latest Deloitte Insights article New rules for trade engagement: Tariff uncertainty puts cross-functional teams to the test looks at how tariffs are no longer just a trade issue. This article is a collaboration across Deloitte Tax, Legal, Consulting, A&A and Global macroeconomic teams. Tariff and trade policy has become a strategic lever impacting tax, legal, risk, supply chain and finance and this article outlines how organisations must respond with a multidisciplinary approach. 

OECD updates

OECD releases revised BEPS Action 5 Transparency Framework and Exchange on Tax Rulings XML Schema

On 8 September 2025, the OECD released a set of revisions to the BEPS Action 5 minimum standard on the spontaneous exchange of information on tax rulings (the “transparency framework”).

Tax Policy reforms: OECD and selected partner economies

On 11 September 2025, the OECD issued its tenth annual edition of Tax Policy Reforms: OECD and Selected Partner Economies. The latest edition notes Governments have increased tax revenues in 2024 to meet rising spending needs driven by health expenditures and ageing populations.

Governing with artificial intelligence

On 18 September 2025, the OECD issued a new report, Governing with AI, outlining the key trends and policy challenges in the development, use, and deployment of AI in and by the public sector. The report includes a special section on the use of AI by tax administrations.

2025 edition of the Tax Debt Management Maturity Model

The 2025 edition of this Maturity Model aims at supporting tax administrations self-assess their current level of maturity with regards to tax debt management practices. It focusses on the core elements of successful tax debt management to streamline tax administration use and improve existing processes, particularly through internal oversight, digitalisation and exchange with peers.

Sri Lanka joins Global Forum as 173rd member

On 18 September 2025, the OECD announced Sri Lanka has become the 173^rd member of the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum).

Albania signs STTR MLI

On 23 September 2025, Albania signed the Multilateral Convention to Facilitate the Implementation of the Pillar Two Subject to Tax Rule (the STTR MLI), becoming the 10th jurisdiction to join the agreement.

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