Snapshot of recent developments

Tax Legislation and Policy Announcements

GST treatment of levies

Over the last three years, legislative charges, including levies, have gradually been brought within the GST net under legislation enacted from 1 July 2023. This process culminated on 1 July 2026, when all legislative charges became subject to GST.

Historically, the GST treatment of these charges could be confusing. Similar legislative charges were not always treated consistently for GST purposes. Some attracted GST, while others did not, and in certain cases, taxpayers had binding rulings confirming that a particular levy was not subject to GST.

From 1 July 2026, any legislative charges, including fees or levies (but excluding taxes, fines and penalties), are deemed to be consideration for a supply of goods or services. As a result, these legislative charges are now subject to GST.

For most businesses this shouldn’t have an impact, as the GST charged will be recoverable, but depending on how invoices are coded and reviewed, the prior treatment could be rolled forward.  As this is potentially the first year with differing treatment, this is the year to review the treatment of invoices and ensure that GST is being claimed where it previously hasn’t been charged.

Treasury: Aggregate Personal Income Tax Revenue Estimate Tool

On 25 August 2026, Treasury updated its Aggregate Personal Income Tax Revenue Estimate Tool. The Tool is Excel-based and allows the user to modify the tax brackets, the tax rates, and the indirect and company tax offset, and outputs an estimated change in revenue along with plots of the marginal tax rates and the average tax rates.

Information Release: Approval for Approved Information Sharing Agreement between Inland Revenue and Customs

On 27 August 2026, Inland Revenue issued an information release which includes documents relating to the Approval for Approved Information Sharing Agreement between Inland Revenue and Customs.

Inland Revenue Technical Updates

Inland Revenue: Tax Information Bulletin – August 2026 (Vol. 38, No 7)

On 3 August 2026, Inland Revenue issued its August 2026 Tax Information Bulletin. The Tax Information Bulletin covers the following recent tax developments:

Rulings

• BR Prd 26/03 – 26/06 Reach Media New Zealand Limited
• BR Prd 26/07 Ministry of Education

Question We’ve Been Asked

• QB 26/04 Income tax – Bare trusts and mortgages

Case summaries

• CSUM 26/08 High Court dismisses judicial review
• CSUM 26/09 High Court concludes the TCRA was correct in finding work done on commercial building was capital in nature
• CSUM 26/10 The TCRA confirms the Commissioner’s denial of deductions was correct

Technical decision summaries

• TDS 26/07 Employee allowances – tax exemption and PAYE treatment
• TDS 26/08 Disposal of property and shortfall penalties
• TDS 26/09 Excepted financial arrangement

Public Rulings: GST – Directors’ fees and board members’ fees

On 6 August 2026, Inland Revenue issued three public rulings (BR Pub 26/01 – 26/03) relating to the GST treatment of directors’ fees and board members’ fees. These replace rulings BR Pub 23/01 – 23/03, which have been withdrawn. The replacement was necessary as a recent amendment to section 6(4) of the GST Act 1985 means parts of those previous publications are now incorrect.

The Fact Sheet and Question We’ve Been Asked (QB 26/05) associated with the rulings have also been updated.

Question We’ve Been Asked: GST - Directors or board members who provide services through a personal services company

On 6 August 2026, Inland Revenue issued Question We’ve Been Asked QB 26/05: GST – Directors or board members who provide services through a personal services company. This item replaces QB 23/07 and considers whether a personal services company (PSC) can register for GST where it provides the services of a director or board member who could not register for GST if acting in their personal capacity. Inland Revenue concludes that a PSC can register for GST where it contracts directly with the company or organisation and carries on a taxable activity. Where the director or board member contracts directly with the company but pays their fees to a PSC employer, section 6(4) of the GST Act will apply to treat those fees as consideration for a supply of services by the PSC to the company or organisation.

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

On 17 August 2026, Inland Revenue published interpretation statement IS 26/13: Income Tax: payments by employers on the death of an employee to executors and family. The statement considers whether amounts paid by employers on the death of an employee are taxable to the recipients, which could include executors and family members. The statement also considers the deductibility of payments made by employers, whether employers have PAYE obligations in respect of payments, and the duties of executors to file tax returns for the deceased employee and any estate that may arise.

Determination: Tax Administration (Fringe Benefit Tax, Interest on Loans) Determination 2026

On 26 August 2026, Inland Revenue issued determination DET 26/06: Tax Administration (Fringe Benefit Tax, Interest on Loans) Determination 2026. The determination increases the prescribed interest rate for employment-related loans from 5.77% to 6.07% for the quarter beginning 1 October 2026.

Tax Cases and Technical Decision Summaries

Case Summary: The Taxation & Charities Review Authority confirms the Commissioner’s denial of deductions was correct

On 28 July 2026, Inland Revenue issued case summary CSUM 26/10: The Taxation & Charities Review Authority confirms the Commissioner’s denial of deductions was correct. The case concerned a taxpayer who claimed deductions for education, motor vehicle and home office expenses, together with GST input tax deductions for various pre-registration costs. The Authority found that the taxpayer's business had not commenced until November 2020 and upheld the Commissioner’s denial of the claims, finding that the expenses were either incurred before the business commenced, unrelated to the business, or insufficiently substantiated. The Authority also upheld the denial of the GST claims and confirmed that shortfall penalties for not taking reasonable care were properly imposed.

Case Summary: Court of Appeal upholds the High Court’s award of indemnity costs to the Commissioner

On 10 August 2026, Inland Revenue published case summary CSUM 26/11: Court of Appeal upholds High Court award of indemnity costs to the Commissioner. The case concerned a taxpayer who commenced judicial review proceedings after the District Court struck out his defence to Inland Revenue debt recovery proceedings and a bankruptcy notice was issued. The Court of Appeal upheld the High Court's award of indemnity costs, finding that the judicial review was properly viewed as a hopeless case and an attempt to delay recovery action and indirectly challenge the underlying tax assessments. The Court also confirmed that reliance on legal advice does not necessarily prevent an award of indemnity costs.

Technical Decision Summary: GST – amalgamation

On 14 August 2026, Inland Revenue published technical decision summary TDS 26/10: GST – amalgamation. The summary considers a private ruling on the GST consequences of an amalgamation involving several wholly owned group companies. The Tax Counsel Office concluded that the companies were eligible to form a GST group prior to the amalgamation and that no GST liabilities arose from the transfer of assets to the amalgamated company. The ruling also confirmed that certain deemed supplies made on the deregistration of an unincorporated body were zero-rated and that the anti-avoidance provision in section 76 of the GST Act did not apply to the arrangement.

Technical Decision Summary: Income tax – amalgamation

On 14 August 2026, Inland Revenue published technical decision summary TDS 26/11: Income tax – amalgamation. The summary considers a private ruling on the income tax consequences of an amalgamation involving a group of wholly owned companies. The Tax Counsel Office concluded that the amalgamation qualified as a resident's restricted amalgamation, allowing various rollover relief provisions in subpart FO to apply so that no income, losses or depreciation recovery arose on the transfer of shares, amortising property and certain intercompany loans. The ruling also confirmed that anti-avoidance provisions did not apply, as the amalgamation was undertaken for commercial purposes to simplify the group structure and reduce compliance costs.

Technical Decision Summary: Property as trading stock

On 28 August 2026, Inland Revenue published technical decision summary TDS 26/12: Property as trading stock. The summary considers a private ruling on whether a commercial building and fit-out held by a property developer qualified as trading stock for Investment Boost purposes. The Tax Counsel Office concluded that the building and fit-out were trading stock, finding that the taxpayer's dominant purpose was to sell the property in the ordinary course of its business. In reaching this conclusion, it noted that the taxpayer was established to develop and sell the property, had actively marketed it to potential purchasers, and leased the building primarily to enhance its attractiveness to buyers.

Inland Revenue Media Releases and other updates

Inland Revenue: Care required when advising clients on salary sacrifice arrangements

On 29 July 2026, Inland Revenue advised that employers may have PAYE and FBT obligations if an employee’s salary sacrifice arrangement is not valid. Inland Revenue is seeing tax agents provide generalised advice to employers on what constitutes a valid salary sacrifice arrangement.

However, whether a salary sacrifice is valid depends on the specific facts of each case and is determined by case law. Additionally, where an employee salary sacrifices an amount to buy a bicycle or other low-powered vehicle, the employer may be required to account for GST on the supply, even if the vehicle is provided by a third party.

Inland Revenue does not approve or endorse specific arrangements, but there are product rulings relating to bicycles and other low-powered vehicles on its Tax Technical website.

Inland Revenue: Working for Families fraud ends in home detention

On 29 July 2026, Inland Revenue issued a media release detailing the home detention sentence imposed on an Auckland woman who had claimed Working for Families tax credits that she was not entitled to.

Inland Revenue: Gisborne couple sentence for tax fraud

On 30 July 2026, Inland Revenue published a media release detailing the sentencing of a Gisborne couple who had committed tax fraud in relation to Working for Families, GST and income tax. 

Inland Revenue: Overdue tax and late tax returns – automated messages

On 20 August 2026, Inland Revenue issued an update on overdue tax and late tax returns. Inland Revenue will be contacting groups of taxpayers who have overdue tax over $100 throughout August and September. Some of these taxpayers also have overdue tax returns. Taxpayers may also receive a pre-recorded call or voice message reminding them to pay the overdue tax and file their tax return.

Inland Revenue: Bogus expenses claims are fraud

On 26 August 2026, Inland Revenue published a media release stating that it has identified a coordinated scheme of people claiming bogus expenses and thereby committing fraud. Inland Revenue has stopped nearly 3,000 fraudulent amended returns, including 542 received in one night, preventing a total of $4.015 million in bogus claims. Those claiming such expenses may face repayment obligations, a 150% evasion shortfall penalty and prosecution.

Inland Revenue: Home detention for tax evasion

On 28 August 2026, Inland Revenue published a media release detailing the home detention sentence imposed on a New Plymouth woman who was charged with 31 counts of tax evasion.

Inland Revenue: Changes to the taxpayer ruling and determination application process

On 28 August 2026, Inland Revenue advised that from 14 September, applications for private, product and status rulings—including unilateral advance pricing agreements (UAPAs)—must be submitted through myIR. The same requirement will apply to applications for financial arrangement and depreciation determinations. Only the application channel is changing: the information required and the ruling process will remain the same. Inland Revenue has also published answers to questions raised about the new application process on its Tax Technical website.

Inland Revenue: myIR business account registration changes

On 31 August 2026, Inland Revenue advised that from 12 September 2026 it will be removing the ability to register for GST and EMP tax accounts during the non-individual IRD number application process. Instead, taxpayers will need to complete the non-individual IRD number application first, then apply separately for EMP and GST. EMP and GST registrations will be available for non-restricted users in the Intermediary centre under ‘client registration’. There is no change to the Companies Office process, and taxpayers incorporating a company can still register for GST and EMP when applying for an IRD number.

Inland Revenue is also introducing a new online registration for non-resident GST on remote services (GORS) and Low value imported goods (LVIG) called ‘Register for GST as an overseas business’, which will require GST information to be provided as part of the registration process.

International Tax updates

Hungary Authorises Signing of Tax Treaty with New Zealand

On 7 August 2026, the Hungarian government authorised the signing of the new income tax treaty between Hungary and New Zealand.

A New Tax System (Wine Equalisation Tax) (New Zealand Producer Rebate Foreign Exchange Conversion) Determination 2026

On 10 August 2026, the Australian Department of the Treasury published A New Tax System (Wine Equalisation Tax) (New Zealand Producer Rebate Foreign Exchange Conversion) Determination 2026, which is now in force. The determination sets out how eligible New Zealand wine producers must convert amounts expressed in foreign currencies into Australian dollars when calculating their producer rebate entitlement under the Wine Equalisation Tax regime.

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