Tax governance and the BCP: Key considerations for 2026 and beyond

By Annamaria Maclean, Vicky Yen & Charlotte Mackenzie

With the new tax year in full swing, now is an opportune time to reflect on the state of your tax governance and any potential actions that may be required.

Tax governance has been a significant focus area for Inland Revenue, and if it becomes aware of governance weaknesses it can lead to an audit and reduced scope for shortfall penalty mitigation. As raised in our December 2025 Tax Alert article, taxpayers who have now received a Basic Compliance Package (BCP*) request (for the 2025 income tax year) would have seen the addition of the following governance focused questions:

• Whether there have been any significant changes to the Tax Governance control framework within the last three years.
• A self-assessment using Inland Revenue’s Tax Governance Maturity Model (emerging, progressing, established or aspirational) of which phase best describes the current maturity of the taxpayer.
• An indication of the key challenges taxpayers are facing in improving tax governance maturity.

Taxpayers who are subject to this year’s BCP request have until 30 April 2026 to respond, and should be prepared for follow up questions. Other taxpayers within the BCP population (New Zealand owned multinationals with a turnover of at least NZD 80 million or foreign owned multinationals with a turnover of at least NZD 30 million) which were not selected this year should expect engagement from Inland Revenue either next year or the year after, under the three-yearly BCP cycle. We expect governance to continue as a key, ongoing consideration in future BCP rounds.

Beyond the BCP process, governance remains fundamental for taxpayers of all profiles and will continue to play an important part in Inland Revenue’s risk assessment procedures more generally. We have also seen an increase in other governance related compliance activity, with Inland Revenue actively undertaking specific tax governance audits, where it has used the 10 point tax governance checklist as a starting point for audit discussions and information requests.

How we can help

Participating advisor tax governance review

The participating advisor tax governance review is a good option for taxpayers who would like independent testing to be undertaken, with feedback provided on a tax type by tax type basis. Under the participating advisor framework, Inland Revenue has reviewed and approved Deloitte’s methodology and this review also comes with the protection that Inland Revenue should not separately undertake further testing on governance for a four-year period (provided there are no significant organisational or system changes). For more detail on the participating advisor framework please see December 2025 article and the relevant Inland Revenue and Deloitte webpages.

Tax governance review - Lite version

A “lite” version of the tax governance review is also available as an alternative option. This involves a reduced questionnaire that you would pre-populate for further collaborative discussion in a Deloitte-led workshop. Our deliverables include a risk heatmap presented at an overall organisational level (compared to the full review which presents our risk heatmap and findings for each tax type), Deloitte’s initial view of placement on Inland Revenue’s maturity model and a discussion on key recommendations. While not a participating advisor review, we believe this ‘lite’ review would also be viewed favourably by Inland Revenue as a Deloitte guided, proactive self assessment based on current commentary and expectations.

Other ways

Other common ways Deloitte can provide support include assistance with drafting and reviewing governance documentation, and holding strategy by design workshops/walk throughs to capture and review the design of processes and controls.

Please reach out to your usual Deloitte advisor if you would like to discuss the various ways we can support you on your journey to establishing, maintaining and testing a good tax governance framework.