Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026
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Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026
Public Act |
2026 No 8 |
|
Date of assent |
30 March 2026 |
|
Commencement |
see section 2 |
Contents
The Parliament of New Zealand enacts as follows:
1 Title
This Act is the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026.
2 Commencement
(1)
This Act comes into force on 31 March 2026, except as provided in this section.
(2)
Section 170 comes into force on 10 October 2000.
(3)
Sections 7, 27, 32, 34, 35, 36, 37, 38, 39(1) and (3), 83, 125, 144(2) and (3), and 192(1) come into force on 1 April 2008.
(4)
Section 86 comes into force on 1 January 2009.
(5)
Sections 87 and 131(20)(a), (35)(a), (43)(a), and (45) come into force on 1 April 2010.
(6)
Section 144(4) comes into force on 21 June 2010.
(7)
Section 192(2) and (3) comes into force on 1 August 2010.
(8)
Sections 148(5) and (11) and 152(1) and (4) come into force on 1 April 2011.
(9)
Section 144(5) comes into force on 13 August 2013.
(10)
Sections 33 and 39(2) and (4) come into force on 1 April 2017.
(11)
Section 144(6) comes into force on 18 April 2017.
(12)
Sections 63(1)(a) and 66 come into force on 1 July 2018.
(13)
Section 213(3)(d) and (e) comes into force on 18 March 2019.
(14)
Section 252(2) comes into force on 1 April 2019.
(15)
Section 88 comes into force on 1 April 2020.
(16)
Section 214(2) and (3) comes into force on 1 April 2021.
(17)
Section 245 comes into force on 30 March 2022.
(18)
Section 118(3), (4), (5), (6), (7), and (8) comes into force on 1 April 2022.
(19)
Section 144(7) and (8) comes into force on 7 December 2022.
(20)
Sections 151(1), 167, and 175(1) come into force on 1 April 2023.
(21)
Section 116 comes into force on 1 April 2024.
(22)
Sections 80 and 127 come into force on 1 July 2024.
(23)
Section 214(1) comes into force on 31 July 2024.
(24)
Sections 131(7), (20)(b), and (43)(b) and (c), 134, and 135 come into force on 26 August 2024.
(25)
Section 145 comes into force on 21 February 2025.
(26)
Section 144(9) comes into force on 5 March 2025.
(27)
(28)
Sections 6, 8(2), 13(2), 14, 30, 47, 48(2), 49, 55(1) and (4), 56, 57(1), (2), (3), (4), (6), (7), (8), and (9), 58, 59, 62, 63(1)(b), (2), and (3), 64, 68, 69, 70, 71, 72, 73, 74(2), (4), and (5), 75, 76, 78, 84, 101, 103, 104, 121, 124, 131(5), (12), (13), (14), (30), (31), (32), (33), and (34), 144(10), 162, 207, and 209 come into force on 1 April 2025.
(29)
Sections 8(1) and (3), 24, 25, 29, 117, 118(1) and (2), 119, 120(1), and 131(4) and (16) come into force on 16 April 2025.
(31)
Section 99 comes into force on 1 July 2025.
(32)
Section 144(11) comes into force on 16 July 2025.
(33)
Section 144(12) comes into force on 30 July 2025.
(34)
Section 193(3) comes into force on 26 August 2025.
(35)
Section 213(3)(c) comes into force on 1 October 2025.
(36)
Sections 91, 100, and 131(2) and (37) come into force on 26 December 2025.
(37)
Sections 19(2) and 131(38) come into force on 12 January 2026.
(38)
Sections 113, 114, 152(3), and 218(2) come into force on 21 February 2026.
(39)
Sections 244 and 246(2) come into force on 31 March 2026.
(40)
Sections 9, 10, 11, 12, 13(1) and (3), 15, 16, 17, 18, 23, 26, 28, 48(1) and (3), 50, 51, 52, 55(2), (3), and (5), 57(5) and (10), 60, 61, 65, 74(1) and (3), 81, 82, 90, 92, 105(1), 106, 109, 111, 115, 120(2), 122, 123, 128, 131(3), (6), (8), (9), (10), (11), (15), (18), (19), (21), (22), (25), (27), (28), (29), (35)(b), (39), (40), (42), and (46), 136, 137, 138, 139, 140, 141, 142, 143(1), 144(14), 148(2), (3), (4), (6), (7), (8), and (10), 149, 150, 151(2), (3), and (4), 152(2), 153(2), 154(2) and (3), 156, 160, 161, 164, 165, 166, 169, 171, 172, 173, 176, 179(2), (3), (4), (8), and (9), 186, 194, 195, 196, 198, 199, 208, 211, 213(1), (3)(a) and (b), (5), and (6), 222, 223, 224, 235, 238(2), 249, 250, and 251 come into force on 1 April 2026.
(41)
Section 213(2) and (4) comes into force on 1 July 2026.
(42)
Section 143(2) comes into force on 1 April 2028.
(43)
Section 105(2) comes into force on a single date set by Order in Council.
(44)
If section 105(2) has not come into force by 1 April 2027, it comes into force then.
(45)
An Order in Council made under subsection (43) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
| Legislation Act 2019 requirements for secondary legislation made under this section | ||||
| Publication | PCO must publish it on the legislation website and notify it in the Gazette | LA19 s 69(1)(c) | ||
| Presentation | The Minister must present it to the House of Representatives | LA19 s 114 | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
Section 2(1): editorial change made by the PCO, on 22 April 2026, under sections 86(1) and 87(m) of the Legislation Act 2019 (2019 No 58).
Part 1 Annual rates of income tax
3 Annual rates of income tax for 2025–26 tax year
Income tax imposed by section BB 1 (Imposition of income tax) of the Income Tax Act 2007 must, for the 2025–26 tax year, be paid at the basic rates specified in schedule 1 of that Act.
Part 2 Amendments to Income Tax Act 2007
4 Amendments to Income Tax Act 2007
This Part amends the Income Tax Act 2007.
5 Section CC 15 replaced (New investment assets: change of use)
Replace section CC 15 with:
CC 15 New investment assets: change of use
When this section applies
(1)
This section applies, for a person and a new investment asset, when—
(a)
the person has deducted an amount (the deducted DI 5 amount) for expenditure incurred in acquiring the asset under section DI 5 (New investment asset deduction) for an income year; and
(b)
the person changes their use of the asset in a subsequent income year; and
(c)
the change of use means the amount of the deduction the person would have been allowed under section DI 5 if the section were applied as if the income year were the income year in which the change of use occurs is less than the deducted DI 5 amount.
When this section does not apply: less than 25% change in use
(2)
This section does not apply when the amount calculated using the following formula, expressed as a percentage, is less than 25%:
1 − (new DI 5 deduction ÷ existing DI 5 deduction).
Income
(3)
The person has an amount of income equal to the amount calculated using the following formula:
existing DI 5 deduction − new DI 5 deduction.
Items in formulas
(4)
In the formulas in subsections (2) and (3),—
(a)
new DI 5 deduction is the amount the person would have been allowed as a deduction under section DI 5 if the section were applied as if the income year referred to in the section were the income year in which the change of use occurs:
(b)
existing DI 5 deduction is,—
(i)
if subparagraph (ii) does not apply, the deducted DI 5 amount:
(ii)
if this section has previously been applied to the asset, the amount that was the new DI 5 deduction amount in the formula on the preceding application of this section.
Relationship with subject matter
(5)
For an asset that is depreciable property, the amount of income under subsection (3) increases the asset’s adjusted tax value for the purposes of section EE 48(1)(a) (Effect of disposal or event).
Example 1
Thomas buys a new yacht for $100,000 that he begins using in the 2025–26 income year. He determines that the yacht will be used 90% of the time for business use and chooses to claim a new investment asset deduction on this basis. He therefore claims $18,000 as a new investment asset deduction, which is 90% of the full $20,000 deduction that was available to him under section DI 5. However, he reduces the cost or adjusted tax value used for determining depreciation of the yacht by $20,000 in accordance with section DI 6. In the 2026–27 income year, he only uses the yacht 40% of the time for business. This is a change of use of 25% or more. Had Thomas taken the new investment asset deduction in the 2026–27 income year, he would only have been entitled to claim $8,000, being 40% of the full deduction available. Thomas must return income of $10,000 ($18,000 − $8,000) in the 2026–27 income year. The asset’s adjusted tax value is increased by $10,000 accordingly.
Example 2
Adam buys a commercial property, comprising land and a commercial building, for $15 million in the 2025–26 income year. The cost of the building is $10 million. He claims $2 million as a new investment asset deduction in that income year, and the cost or adjusted tax value of the building is reduced to $8 million. In the 2027–28 income year, Adam decides to rent out the top floor of the building as residential accommodation. This constitutes 25% of the floor space of the building. This is a change of use of 25% or more. Had Adam taken the new investment asset deduction in the 2027–28 income year, the building would only have been a new investment asset to the extent of the 75% of the building that was not a dwelling. Therefore, Adam would only have been able to claim a new investment asset deduction of $1.5 million, being 75% of the full deduction available. Adam must return income of $500,000 ($2 million − $1.5 million) in the 2027–28 income year. The adjusted tax value of the building is increased by $500,000 accordingly.
Defined in this Act: adjusted tax value, amount, commercial building, deduction, depreciable property, dwelling, income, income year, land, new investment asset
6 Section CD 36 amended (Foreign investment fund income)
(1)
After section CD 36(1)(b)(iv), insert:
(v)
the revenue account method; and
(2)
In section CD 36, list of defined terms, insert “revenue account method”
.
7 Section CD 44 amended (Available capital distribution amount)
(1)
In section CD 44(1), in the formula, replace “capital gains”
with “net capital amount”
and delete “− capital losses”
.
(2)
Replace section CD 44(2)(c) with:
(c)
net capital amount is the total of the capital gain amounts less the capital loss amounts arising in the 1992–93 tax year or a later tax year that is available for distribution to shareholders in the company on liquidation but excluding any gain or loss occurring when the company distributes property to shareholders on the liquidation:
(3)
Repeal section CD 44(2)(f).
(4)
Replace section CD 44(8) with:
Net capital gain: amalgamated company inheriting net capital gain
(8)
An amalgamated company is treated as deriving, at the time of the amalgamation, an amount (the net amount) equal to the total of the capital gain amounts, less capital loss amounts arising in the 1992–93 tax year or a later tax year, of an amalgamating company to the extent to which—
(a)
the amalgamating company’s net amount was available for distribution at the time of the amalgamation; and
(b)
was not distributed to any person other than the amalgamated company.
Exception when amalgamated and amalgamating company the same
(8BA)
Subsection (8) does not apply to an amalgamated company if the amalgamated company is the same company as the amalgamating company.
(5)
Replace section CD 44(10)(a) with:
(a)
the total of the capital gain amounts arising after 31 March 1988 that are available for distribution to shareholders in the company on the liquidation, excluding any gain occurring when the company distributes property to a shareholder on the liquidation; and
(6)
Subsections (1) to (5) apply for the 2008–09 and later income years.
8 Section CE 1 amended (Amounts derived in connection with employment)
(1)
After section CE 1(2), insert:
Meaning of benefit in money
(2B)
In this section, benefit in money does not include a gift card unless—
(a)
the employer chooses to treat the provision of a gift card to an employee as an amount derived in connection with their employment; or
(b)
the provision of the card has a purpose or effect of defeating the application of the Child Support Act 1991.
(2)
After section CE 1(3B), insert:
Reimbursement of employee expenditure for benefit
(3C)
For the treatment of a reimbursement payment made to an employee for incurring expenditure for a benefit, see section CE 1BA.
(3)
In section CE 1, list of defined terms, insert “benefit in money”
, “employment”
, and “gift card”
.
9 New section CE 1BA inserted (Reimbursement of employee expenditure for benefit)
After section CE 1, insert:
CE 1BA Reimbursement of employee expenditure for benefit
When this section applies
(1)
This section applies when an employer pays an amount to reimburse an employee for expenditure the employee has incurred for a benefit that, if the employer provided it directly to the employee, would constitute an unclassified benefit under section CX 37 (Meaning of unclassified benefit).
Employer election
(2)
The amount paid by the employer is, at the employer’s election, either—
(a)
employment income of the employee under section CE 1; or
(b)
an unclassified benefit under section CX 37.
Exempt income
(3)
If the employer chooses to treat the amount paid as employment income of the employee, as described in subsection (2)(a), section CW 17BA (Reimbursement of expenditure paid as employment income) applies to the payment.
Exclusion: payments for certain work-related meals
(4)
Subsection (2) does not apply when an employer pays an amount to reimburse an employee for expenditure to which section CW 17CB (Payments for certain work-related meals) applies and the time limit in subsection (5) of that section has elapsed.
Defined in this Act: amount, employee, employer, employment income, pay, unclassified benefit
10 Section CE 7B amended (Meaning of share scheme taxing date)
(1)
After section CE 7B(2), insert:
Meaning for employee deferred shares
(3)
Despite subsections (1) and (2), if the shares are employee deferred shares under section EA 4B (Deferred tax for unlisted employee share schemes), the share scheme taxing date is the liquidity event date.
(2)
In section CE 7B, list of defined terms, insert “employee deferred shares”
, “liquidity event date”
, and “share scheme taxing date”
.
(3)
Subsections (1) and (2) apply to shares issued or transferred by a company under an employee share scheme on or after 1 April 2026.
11 Section CF 1 amended (Benefits, pensions, compensation, and government grants)
(1)
In section CF 1(2), in the definition of pension, paragraph (a), replace “in return for services that the person”
with “or a trustee of their estate if that person”
and replace “provided to”
with “provided services to”
.
(2)
In section CF 1(2), in the definition of pension, replace paragraph (b) with:
(b)
does not include a payment made to—
(i)
the person because of, and within 1 year after, the death of that parent, child, spouse, civil union partner or de facto partner, former spouse, civil union partner or de facto partner, or dependant:
(ii)
a trustee of the person’s estate because of, and within 1 year after, the person’s death.
12 New section CH 10C inserted (Interest apportionment: Non-qualifying infrastructure debt)
(1)
After section CH 10B, insert:
CH 10C Interest apportionment: non-qualifying infrastructure debt
An amount derived by a person under section FE 7C(4) (Exemption for eligible infrastructure) is income of the person.
Defined in this Act: amount, income
(2)
Subsection (1) applies for the 2026–27 and later income years.
13 Section CQ 5 amended (When FIF income arises)
(1)
After section CQ 5(1)(c)(xiv), insert:
(xivb)
the exemption for share users in returning share transfers in section EX 43B (Exemption for share users in returning share transfers):
(2)
In section CQ 5(1)(g), replace “EX 56”
with “EX 56B”
.
(3)
In section CQ 5, list of defined terms, insert “returning share transfer”
and “share user”
.
14 Section CV 19 amended (Additional income for certain imputation credits)
(1)
After section CV 19(2)(b), insert:
(c)
the revenue account method.
(2)
In section CV 19, list of defined terms, insert “revenue account method”
.
15 Section CW 17 amended (Expenditure on account, and reimbursement of, employees)
In section CW 17(5), after “CW 16F,”
, insert “CW 17BA,”
.
16 New section CW 17BA inserted (Reimbursement of expenditure paid as employment income)
After section CW 17, insert:
CW 17BA Reimbursement of expenditure paid as employment income
When this section applies
(1)
This section applies when an employer chooses to treat an amount paid to an employee under section CE 1BA (Reimbursement of employee expenditure for benefit) as employment income.
Exempt income
(2)
An amount paid as employment income under section CE 1BA(2)(a) is exempt income of the employee to the extent to which the payment would not have exceeded the threshold limits in section RD 45 (Unclassified benefits and gift cards) had the payment been treated as an unclassified benefit under section CX 37 (Meaning of unclassified benefit).
Defined in this Act: amount, employee, employer, employment income, exempt income, unclassified benefit
17 Section CW 19 amended (Amounts derived during short-term visits)
In section CW 19(3), after “section”
, insert “and sections CW 22B and CW 22C”
.
18 New sections CW 22B to CW 22D inserted
After section CW 22, insert:
CW 22B Amounts derived by non-resident visitors during visits
Exempt income
(1)
Income a non-resident visitor derives from performing personal or professional services in New Zealand during a visit is exempt income if—
(a)
the services are performed for or on behalf of a person who is not resident in New Zealand; and
(b)
the amount derived from the personal or professional services is liable to tax in the country or territory outside New Zealand in which the non-resident visitor is resident or liable to tax on the basis of citizenship.
Exclusion
(2)
This section does not apply to the income of a public entertainer.
Defined in this Act: amount, exempt income, income, New Zealand, non-resident, non-resident visitor, public entertainer, resident in New Zealand, tax
CW 22C Amounts derived by non-residents from non-resident visitors in New Zealand
Exempt income
(1)
An amount of income derived by a non-resident person that has a source in New Zealand under section YD 4(2) or (3) (Classes of income treated as having New Zealand source) is exempt income if—
(a)
the income has a source in New Zealand only because a person who is a non-resident visitor is physically present in New Zealand; and
(b)
the amount derived is liable to tax in the country or territory outside New Zealand in which the non-resident person is resident or liable to tax on the basis of citizenship.
Exclusion
(2)
This section does not apply to the income of a public entertainer.
Defined in this Act: amount, exempt income, income, New Zealand, non-resident, non-resident visitor, public entertainer, tax
CW 22D Treatment of non-resident visitors for sections CW 22B and CW 22C
When this section applies
(1)
This section applies to an amount of income derived by a non-resident visitor from performing personal or professional services in New Zealand or an amount of income derived by a non-resident person that has a source in New Zealand under section YD 4(2) or (3) (Classes of income treated as having New Zealand source) if—
(a)
the amount is not liable to tax in a country or territory outside New Zealand in accordance with section CW 22B(1)(b) or CW 22C(1)(b), as applicable, because the non-resident visitor has ceased to be either resident in that country or territory or liable to tax on the basis of citizenship; and
(b)
section YD 1B(4) (Non-resident visitors) applies to the non-resident visitor; and
(c)
the laws of the country or territory outside New Zealand referred to in section YD 1B(4) treat the person’s cessation of residency or liability to tax as having occurred on an earlier date (the effective date) than the date the person stops being a non-resident visitor under that section (the cessation date); and
(d)
the amount is derived in the period starting on the effective date and ending on the cessation date.
Amount treated as liable to tax in foreign country or territory
(2)
For the purposes of section CW 22B(1)(b) or CW 22C(1)(b), as applicable, the amount derived is treated as being liable to tax in the country or territory outside New Zealand.
Defined in this Act: amount, income, New Zealand, non-resident, non-resident visitor, tax
19 Section CW 38 amended (Public authorities)
(1)
Repeal section CW 38(3).
(2)
After section CW 38(5)(e), insert:
(f)
New Zealand Institute for Advanced Technology.
20 Section CW 38B amended (Public purpose Crown-controlled companies)
Repeal section CW 38B(3).
21 Section CW 39 amended (Local authorities)
Repeal section CW 39(3).
22 Section CW 55BC amended (Water organisations)
In section CW 55BC(2), replace “In this section and section CW 39, water”
with “Water”
.
23 New section CW 61B inserted (Income from supply of excess electricity from dwelling)
(1)
After section CW 61, insert:
CW 61B Income from supply of excess electricity from dwelling
Exempt income
(1)
An amount derived by a natural person from the supply of excess electricity generated at a dwelling occupied as a residence by the person is exempt income.
Meaning of excess electricity
(2)
For the purposes of this section, excess electricity means electricity generated at a dwelling that is not consumed at the dwelling and is supplied to an electricity retailer.
Defined in this Act: amount, dwelling, excess electricity, exempt income, natural person
(2)
Subsection (1) applies for the 2026–27 and later income years.
24 Section CX 2 amended (Meaning of fringe benefit)
In section CX 2(1)(b)(i), replace “CX 16”
with “CX 16B”
.
25 New section CX 16B inserted (Gift cards)
After section CX 16, insert:
CX 16B Gift cards
When fringe benefit arises
(1)
A fringe benefit arises when an employer provides a gift card to an employee, unless the employer chooses to treat it as an amount derived in connection with the employee’s employment under section CE 1 (Amounts derived in connection with employment).
When value of benefit is employment income
(2)
Despite subsection (1), if the provision of the card has a purpose or effect of defeating the application of the Child Support Act 1991, the value of the benefit is an amount derived in connection with the employee’s employment under section CE 1.
Defined in this Act: amount, employee, employer, employment, fringe benefit, gift card
26 Section CX 17 amended (Benefits provided to employees who are shareholders or investors)
Replace section CX 17(4)(b) with:
(b)
in the absence of section CX 4, be, or be treated as, unclassified benefits under section RD 45 (Unclassified benefits and gift cards) if provided to a person in their capacity as an employee.
27 Section CX 24 amended (Benefits related to health or safety)
(1)
Replace section CX 24(c) with:
(c)
either—
(i)
would be excluded by section CX 23 from being a fringe benefit if provided on the employer’s premises; or
(ii)
is personal protective equipment, including clothing, that is used or worn by a person to minimise risks to the person’s health and safety.
(2)
Subsection (1) applies for income years commencing on or after 1 April 2008.
28 Section CX 26 amended (Non-liable payments)
(1)
After section CX 26(2), insert:
Benefits provided to non-resident visitors
(3)
A benefit received by an employee who is a non-resident visitor is not a fringe benefit.
(2)
In section CX 26, list of defined terms, insert “non-resident visitor”
and replace “resident”
with “resident in New Zealand”
.
29 Section CX 37 amended (Meaning of unclassified benefit)
In section CX 37(a), replace “CX 16”
with “CX 16B”
.
30 Section CX 57B amended (Amounts derived during periods covered by calculation methods)
In section CX 57B(1), replace “and cost method”
with “cost method, and revenue account method”
.
31 New section CZ 42 inserted (Transitional tax relief: water organisations)
(1)
After section CZ 41, insert:
CZ 42 Transitional tax relief: water organisations
Who this section applies to
(1)
This section applies to a water organisation that derives—
(a)
assessable income before the 2025–26 income year; and
(b)
exempt income under section CW 55BC (Water organisations) in the 2025–26 or a later income year.
Effect of this section
(2)
No income tax liability arises under this Act for the water organisation solely because of the organisation’s income becoming exempt income under section CW 55BC.
Defined in this Act: assessable income, exempt income, income, income tax liability, income year, water organisation
(2)
Subsection (1) applies for the 2024–25 and 2025–26 income years.
32 Section DE 1 amended (What this subpart does)
(1)
In section DE 1(1), replace “business purposes and partly for other purposes”
with “business use and partly for other uses”
.
(2)
Subsection (1) applies for the 2008–09 and later income years.
33 Section DE 2B amended (Election to use kilometre rate method or costs method)
(1)
In section DE 2B(1)(c), replace “business purposes”
with “business use”
.
(2)
Subsection (1) applies for the 2017–18 and later income years.
34 Section DE 5 amended (Actual records)
(1)
In section DE 5, replace “a motor vehicle for business purposes”
with “the motor vehicle for business use”
.
(2)
Subsection (1) applies for the 2008–09 and later income years.
35 Section DE 7 amended (Logbook requirements)
(1)
In section DE 7(1), replace “business purposes”
with “business use”
.
(2)
Subsection (1) applies for the 2008–09 and later income years.
36 Section DE 9 amended (Inadequate logbook)
(1)
In section DE 9(1), after “proportion of business use”
, insert “of a motor vehicle”
.
(2)
In section DE 9(1), replace “use of a motor vehicle for business purposes”
with “business use of the motor vehicle”
.
(3)
In section DE 9(2)(a), replace “use of the motor vehicle for business purposes”
with “business use of the motor vehicle”
.
(4)
Subsections (1), (2), and (3) apply for the 2008–09 and later income years.
37 Section DE 10 amended (Variance during logbook term)
(1)
In section DE 10, replace “average use of the motor vehicle for business purposes”
with “average business use of the motor vehicle”
.
(2)
Subsection (1) applies for the 2008–09 and later income years.
38 Section DE 11 amended (Replacement vehicles)
(1)
In section DE 11(a), replace “business purposes”
with “business use”
.
(2)
Subsection (1) applies for the 2008–09 and later income years.
39 Section DE 12 amended (Kilometre rate method)
(1)
In section DE 12(2), replace “business purposes”
with “business use”
.
(2)
In section DE 12(3)(b), replace “business purposes and other purposes”
with “business use and other uses”
.
(3)
Subsection (1) applies for the 2008–09 and later income years.
(4)
Subsection (2) applies for the 2017–18 and later income years.
40 Section DI 1 amended (New investment assets)
After section DI 1(2)(c), insert:
(cb)
section DI 4B provides for the treatment of certain items as assets:
41 Section DI 2 amended (When this subpart applies and does not apply)
(1)
Replace section DI 2(1), other than the heading, with:
(1)
This subpart applies for a person and a new investment asset acquired by them if, subject to subsection (1B), the following conditions are met:
(a)
if the asset is depreciable property, it first becomes available for use in New Zealand by the person on or after 22 May 2025; and
(b)
if the asset is not depreciable property, the person incurs expenditure in relation to it on or after 22 May 2025; and
(c)
the asset has never previously been used or available for use in New Zealand by any person for any purpose; and
(d)
the person has chosen to apply this subpart to the asset in a return of income for the income year.
Asset not used or available for use
(1B)
For the purposes of subsection (1), an asset is not considered to have been used or available for use if the asset has been—
(a)
held only as trading stock:
(b)
used only in a manner necessary to prepare the asset for sale or exchange.
(2)
In section DI 2(2), replace “an asset”
with “a new investment asset”
.
(3)
In section DI 2, list of defined terms, insert “new investment asset”
.
42 Section DI 3 replaced (Meaning of new asset transferee)
Replace section DI 3 with:
DI 3 Meaning of new asset transferee
New asset transferee means a person who—
(a)
acquires an asset by way of transfer from another person (person A) who has previously chosen to apply this subpart and been allowed a deduction under section DI 5 for the asset; and
(b)
is treated as having been allowed the pre-transfer deductions that person A is allowed for amounts of depreciation loss under another provision of this Act, including—
(i)
section FB 21 (Depreciable property):
(ii)
section FM 15(7) (Amortising property and revenue account property):
(iii)
section FO 16(4) (Amortising property).
Defined in this Act: amount, deduction, depreciation loss
43 Section DI 4 amended (Meaning of new investment asset)
(1)
Replace section DI 4(a)(viii) with:
(viii)
an alteration, extension, or repair of an asset of the type in any of subparagraphs (i) to (vii) that increases its capital value:
(2)
In section DI 4, list of defined terms, insert “acquire”
and delete “improvement”
.
44 New section DI 4B inserted (Treatment of certain items as assets)
After section DI 4, insert:
DI 4B Treatment of certain items as assets
For the purposes of this subpart,—
(a)
an improvement for which a person is allowed a deduction under section DO 4, DO 12, or DP 3 (which relate to improvements to farm land, aquacultural business, or forestry land) is treated as an asset the person acquires and owns:
(b)
all petroleum development expenditure incurred by a person is treated as giving rise to an asset acquired and owned by the person:
(c)
all mining development expenditure incurred by a person is treated as giving rise to an asset acquired and owned by the person:
(d)
an alteration, extension, or repair of an asset of the type in any of section DI 4(a)(i) to (vii) by a person is treated as an asset the person acquires and owns that is separate from the asset it alters, extends, or repairs.
Defined in this Act: deduction, mining development expenditure, petroleum development expenditure
45 Section DI 5 amended (New investment asset deduction)
In section DI 5(1), replace “equal to the amount calculated by”
with “for the amount calculated using”
.
46 Section DI 6 amended (Relationship to cost, calculations, etc, in other provisions)
(1)
Before section DI 6(1), insert the heading:
Other amounts reduced by amount of section DI 5 deduction
(2)
In section DI 6(1), after “section DI 5 for”
, insert “expenditure incurred in acquiring”
.
(3)
In section DI 6, insert as subsection (2):
Available amount of section DI 5 deduction
(2)
For the purposes of subsection (1), if the amount of person A’s deduction is less than the amount (the available deduction amount) they would have been allowed if they had used the asset wholly in deriving assessable income or carrying on a business for the purpose of deriving assessable income, the applicable amount referred to in subsection (1) is reduced by the available deduction amount for the purposes of quantifying the amount of depreciation loss under subpart EE or the amount of a deduction under subpart DO, DP, DT, or DU, as applicable.
(4)
In section DI 6, replace the Examples with:
Example 1
ABC company purchases a new investment asset (Asset A) for $10,000 on 1 October 2025. Asset A is depreciable property and has a DV rate of 10%. Asset A is used for 6 months in the income year ending 31 March 2026. In the 2025–26 income year, ABC company is allowed the following deduction for the new investment asset under section DI 5:
0.2 × $10,000 = $2,000.
Section DI 6(1)(a) ensures that the cost base for the asset for depreciation purposes is reduced by the amount of the deduction under section DI 5, that is, $10,000 − $2,000 = $8,000. Depreciation for the asset is then calculated for the 2025–26 income year as follows:
10% × 6/12 × $8,000 = $400.
The total deduction for Asset A in the 2025–26 income year is $2,400. The adjusted tax value of the asset for the 2026–27 income year will be $7,600 ($8,000 − $400).
Example 2
ABC Company is in a consolidated group with DEF Company. At the end of the 2025–26 income year, ABC Company transfers Asset A to DEF Company. Section FM 15(7) applies to treat DEF Company as if it has claimed the $400 depreciation loss already claimed by ABC Company. Section DI 6 operates to transfer the $2,000 new investment asset deduction claimed by ABC Company to DEF Company for the purposes of the item new investment asset amount in section EE 48(1B) and (1C) and also operates to ensure the opening value of Asset A for DEF Company for depreciation purposes is $7,600. This means that if DEF Company were to dispose of Asset A at a later date for more than this amount, DEF Company would have depreciation recovery income.
(5)
In section DI 6, list of defined terms, insert “assessable income”
, “consolidated group”
, “depreciation recovery income”
, “dispose”
, and “income year”
.
47 Section DN 5 amended (Foreign investment fund loss)
(1)
After section DN 5(2), insert:
Ring-fencing rule for loss calculated under revenue account method
(2B)
The deduction for a FIF loss calculated under the revenue account method is subject to the ring-fencing rule in section DN 8B.
(2)
In section DN 5, list of defined terms, insert “revenue account method”
.
48 Section DN 6 amended (When FIF loss arises)
(1)
After section DN 6(1)(c)(xiv), insert:
(xivb)
the exemption for share users in returning share transfers in section EX 43B (Exemption for share users in returning share transfers):
(2)
In section DN 6(1)(g), replace “EX 56”
with “EX 56B”
.
(3)
In section DN 6, list of defined terms, insert “returning share transfer”
and “share user”
.
49 New section DN 8B inserted (Ring-fencing cap on deduction: revenue account method)
After section DN 8, insert:
DN 8B Ring-fencing cap on deduction: revenue account method
When this section applies
(1)
This section applies when a person has an amount of FIF loss under section EX 56B(3)(b) (Revenue account method) for an income year.
Amount of deduction
(2)
The amount of deduction the person is allowed in the income year for the FIF loss is limited to the amount of FIF income of the person under section EX 56B in the income year.
Relationship with section EX 59B
(3)
Any excess FIF loss not able to be deducted because of subsection (2) is a RAM net loss able to be carried forward and used under section EX 59B (Ring-fencing RAM net losses).
Defined in this Act: amount, deduction, FIF income, FIF loss, income year, RAM net loss, revenue account method
50 Section DV 27 amended (Employee share schemes)
(1)
In section DV 27(6), after “or loss”
, insert “, arising on the share scheme taxing date,”
.
(2)
In section DV 27, list of defined terms, insert “share scheme taxing date”
.
(3)
Subsections (1) and (2) apply to an employee share scheme to the extent the share scheme taxing date under section CE 7B(1) of the Income Tax Act 2007 arises on or after 1 April 2026. Subsections (1) and (2) do not apply to a person in respect of an employee share scheme that is part of a merger or acquisition transaction for which the person entered into a binding contract before the date on which the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026 receives the Royal assent.
51 New section EA 4B inserted (Deferred tax for unlisted employee share schemes)
(1)
After section EA 4, insert:
EA 4B Deferred tax for unlisted employee share schemes
When this section applies
(1)
This section applies to shares issued or transferred under an employee share scheme by a company that is not—
(a)
a listed company:
(b)
a member of a group of companies where at least 1 member is a listed company.
Designation
(2)
The employer may, at the time the shares are issued or transferred, designate the shares issued or transferred to an employee share scheme beneficiary as employee deferred shares. If the employer makes that designation, the employer must notify both the Commissioner and the employee share scheme beneficiary of that designation within 20 days after the date of issue or transfer, or by a later date allowed by the Commissioner.
Consequences of deferral
(3)
If the employer chooses to designate shares as employee deferred shares under subsection (2), the share scheme taxing date for those shares is deferred to the liquidity event date in accordance with section CE 7B(3) (Meaning of share scheme taxing date).
Meaning of liquidity event date
(4)
Liquidity event date,—
(a)
subject to paragraph (b), means the earliest of the following dates:
(i)
the date on which the company that issued or transferred the shares under the employee share scheme referred to in subsection (1) becomes a listed company; and
(ii)
the date the employee share scheme beneficiary sells or transfers the shares to a person who is not associated with a beneficiary described in section CE 7(a)(i) or (ii) (Meaning of employee share scheme); and
(iii)
the date the shares are cancelled, including by the company ceasing to exist:
(b)
if the date determined under paragraph (a) occurs while the shares are subject to a restriction that prevents their disposal, means the date on which the restriction ends:
(c)
does not include a date referred to in paragraph (a) or (b) if the shares are sold or otherwise exchanged only for shares in a company that would satisfy subsection (1) if it had issued the shares under an employee share scheme.
Defined in this Act: company, deduction, dividend, employee deferred shares, employee share scheme, employee share scheme beneficiary, employer, group of companies, liquidity event date, listed company, share, share scheme taxing date
(2)
Subsection (1) applies to shares issued or transferred by a company under an employee share scheme on or after 1 April 2026.
52 Section EA 5 amended (Income from disposal of original shares under share-lending arrangements)
(1)
In the heading to section EA 5, replace “share-lending arrangements”
with “returning share transfers”
.
(2)
In section EA 5(1)(a) and (b), replace “share-lending arrangement”
with “returning share transfer”
.
(3)
In section EA 5(1)(c), replace “in the following income year (the later income year)”
with “in a later income year”
.
(4)
In section EA 5, list of defined terms, delete “share-lending arrangement”
and insert “returning share transfer”
.
(5)
Subsections (1), (2), (3), and (4) apply to a returning share transfer entered into on or after 1 April 2026.
53 Section EE 38 amended (Items of low value)
After section EE 38(1), insert:
Cost not reduced by section DI 6
(1B)
For the purposes of subsection (1)(a), section DI 6 (Relationship to cost, calculations, etc, in other provisions) does not apply to reduce the cost of the item.
54 Section EE 40 amended (Transfer of depreciable property on or after 24 September 1997)
In section EE 40(7)(b)(ii), after “person.”
, insert “For the avoidance of doubt, section DI 6 (Relationship to cost, calculations, etc, in other provisions) does not apply to reduce the cost of the item.”
55 Section EW 5 amended (What is an excepted financial arrangement?)
(1)
In section EW 5(25), replace “50,000”
with “100,000”
.
(2)
Replace section EW 5(25), other than the heading, with:
(25)
A variable principal debt instrument is an excepted financial arrangement if the total value on every day in an income year for all variable principal debt instruments to which a person is a party is $100,000 or less, except when the person who is a party to the financial arrangement—
(a)
makes an election under section EW 8; or
(b)
is a company.
(3)
In section EW 5, list of defined terms, insert “company”
.
(4)
Subsection (1) applies for the 2025–26 and later income years.
(5)
Subsections (2) and (3) apply for the 2026–27 and later income years.
56 Section EW 54 amended (Meaning of cash basis person)
(1)
Replace section EW 54(1), other than the heading, with:
(1)
A person is a cash basis person for an income year if 1 or both of the following applies in the person’s case for the income year:
(a)
section EW 57(1):
(b)
section EW 57(2).
(2)
Subsection (1) applies for the 2025–26 and later income years.
57 Section EW 57 amended (Thresholds)
(1)
In section EW 57(1), replace “EW 54(1)(a)(i)”
with “EW 54(1)(a)”
.
(2)
In section EW 57(1), replace “100,000”
with “200,000”
.
(3)
In section EW 57(2), replace “EW 54(1)(a)(ii)”
with “EW 54(1)(b)”
.
(4)
In section EW 57(2), replace “1,000,000”
with “2,000,000”
.
(5)
After section EW 57(2)(c), insert:
(d)
for a financial arrangement denominated in a foreign currency, the value calculated by converting the value of the arrangement into New Zealand dollars at the exchange rate applying on the date the person first became a party to the arrangement and,—
(i)
if the principal amount of the arrangement increases, the value of the arrangement is calculated by converting the amount of the increase into New Zealand dollars at the exchange rate applying on the date of the change and adding it to the original New Zealand dollar value of the arrangement:
(ii)
if the principal amount of the arrangement decreases, the value of the arrangement is calculated by converting the amount of the reduction into New Zealand dollars at the exchange rate applying on the date the person first became a party to the arrangement and subtracting it from the original New Zealand dollar value.
(6)
Repeal section EW 57(3) to (9).
(7)
In section EW 57(10), replace “any of subsections (1) to (3)”
with “this section”
.
(8)
In section EW 57, list of defined terms, delete “cash basis person”
, “Commissioner”
, and “spreading method”
.
(9)
Subsections (1), (2), (3), (4), (6), (7), and (8) apply for the 2025–26 and later income years.
(10)
Subsection (5) applies for the 2026–27 and later income years.
58 Section EW 58 amended (Financial arrangements, income, and expenditure relevant to criteria)
(1)
In section EW 58(1), replace “EW 57(1) to (3)”
with “EW 57(1) and (2)”
.
(2)
In section EW 58(4), replace “EW 57(1) to (3)”
with “EW 57(1) and (2)”
.
(3)
In section EW 58(5), replace “EW 57(1) to (3)”
with “EW 57(1) and (2)”
.
(4)
Subsections (1) to (3) apply for the 2025–26 and later income years.
59 Section EW 60 amended (Trustee of deceased’s estate)
(1)
In section EW 60(2)(b), replace “EW 54(1)(a) and (b)”
with “EW 54(1)”
.
(2)
In section EW 60(3), replace “EW 54(1)(a) and (b)”
with “EW 54(1)”
.
60 Section EX 29 amended (Attributing interests in FIFs)
In section EX 29(1)(b), replace “EX 43”
with “EX 43B”
.
61 New section EX 43B inserted (Exemption for share users in returning share transfers)
(1)
After section EX 43, insert:
EX 43B Exemption for share users in returning share transfers
When this section applies
(1)
This section applies when a share user—
(a)
acquires an original share under a returning share transfer; and
(b)
disposes of the original share to a person other than the share supplier or a person associated with the share supplier; and
(c)
acquires an identical share to return to the share supplier under the returning share transfer.
Exemption
(2)
The share user’s rights in the original share and the identical share are not attributing interests in a FIF in an income year.
Exclusion
(3)
Subsection (2) does not apply if—
(a)
the share user is related to the share supplier:
(b)
the returning share transfer is, or is part of, a structured arrangement.
Defined in this Act: associated, attributing interest, FIF, identical share, income year, original share, related, returning share transfer, share supplier, share user, structured arrangement
(2)
Subsection (1) applies to a returning share transfer entered into on or after 1 April 2026.
62 Section EX 44 amended (Five calculation methods)
(1)
In the heading to section EX 44, replace “Five”
with “Six”
.
(2)
After section EX 44(1)(f), insert:
(g)
the revenue account method.
(3)
In section EX 44(2), after “EX 46,”
, insert “EX 46B,”
.
(4)
In section EX 44, list of defined terms, insert “revenue account method”
.
63 Section EX 46 amended (Limits on choice of calculation methods)
(1)
In section EX 46(1)(b),—
(a)
after “EX 47,”
, insert “EX 47B,”
; and
(b)
after “or section”
, insert “EX 46B,”
.
(2)
After section EX 46(9), insert:
Revenue account method
(9B)
A person may use the revenue account method to calculate FIF income or loss from an attributing interest in a FIF only if section EX 46B provides that the person may use the revenue account method.
(3)
In section EX 46, list of defined terms,—
(a)
insert “revenue account method”
; and
(b)
delete “accounting profits method”
, “generally accepted accounting practice”
, “grey list company”
, “IFRS 9”
, “PIE”
, “share supplier”
, and “shareholder”
.
64 New section EX 46B inserted (Limits on choice of revenue account method)
After section EX 46, insert:
EX 46B Limits on choice of revenue account method
What this section does
(1)
This section sets out when a person may choose to use the revenue account method to calculate FIF income or loss from an attributing interest in a FIF for an income year.
Revenue account method
(2)
A person may use the revenue account method to calculate FIF income or loss from an attributing interest in a FIF only if—
(a)
either—
(i)
the person is a RAM taxpayer and the interest is a RAM interest; or
(ii)
the person is an extended RAM taxpayer and the interest is an extended RAM interest; and
(b)
the person chooses to use the revenue account method for the income year in which the person first meets the tests in section CQ 5 (When FIF income arises) or DN 6 (When FIF loss arises) for a RAM interest or extended RAM interest, as applicable, ignoring all excluded RAM interests, and for each later income year; and
(c)
the person uses the revenue account method to calculate FIF income or loss for all their RAM interests or extended RAM interests, as applicable, other than their excluded RAM interests.
Revenue account method for previously held interests
(3)
Despite subsection (2), a person may also use the revenue account method to calculate FIF income or loss from an attributing interest in a FIF if—
(a)
the person is a New Zealand resident who is not treated as non-resident under a double tax agreement and is not a transitional resident (a returning resident); and
(b)
the person was non-resident, or treated as non-resident under a double tax agreement, before becoming a returning resident; and
(c)
immediately before the person became non-resident, or treated as non-resident under a double tax agreement, the person was a RAM taxpayer; and
(d)
when the person was a RAM taxpayer, the interest was a RAM interest for which the person chose to use the revenue account method to calculate FIF income or loss; and
(e)
the interest is a RAM interest; and
(f)
the person chooses to use the revenue account method for the income year in which the person first meets the tests in section CQ 5 or DN 6 after the person becomes a returning resident and for each later income year; and
(g)
the person uses the revenue account method to calculate FIF income or loss for—
(i)
all interests that satisfy this subsection; and
(ii)
all other interests for which the person may choose to use the revenue account method, if any.
Revenue account method for certain transferred interests
(4)
Despite subsection (2), a person may also use the revenue account method to calculate FIF income or loss from an attributing interest in a FIF if—
(a)
the person is a natural person; and
(b)
the person acquires the interest from a RAM taxpayer or an extended RAM taxpayer in circumstances to which subpart FB (Transfers of relationship property) or section FC 3 (Property transferred to spouse, civil union partner, or de facto partner) apply; and
(c)
the interest was a RAM interest for the RAM taxpayer or an extended RAM interest for the extended RAM taxpayer, as applicable; and
(d)
the RAM taxpayer or extended RAM taxpayer, as applicable, chose to use the revenue account method to calculate FIF income or loss for the interest; and
(e)
if the interest was a RAM interest for a RAM taxpayer, the interest satisfies the criteria set out in paragraph (a) of the definition of RAM interest in subsection (6), ignoring subparagraph (ii).
Revenue account method for previously eligible RAM interests
(5)
Despite subsection (2), if a person holds an attributing interest in a FIF that is a RAM interest for which they use the revenue account method to calculate the FIF income or loss of the interest and that interest ceases to be a RAM interest, the person may continue to use the revenue account method to calculate the FIF income or loss of that interest.
Meaning of RAM interest
(6)
RAM interest, for a person,—
(a)
means an attributing interest in a FIF if—
(i)
the interest is a share in a foreign company; and
(ii)
the share was acquired by the person before, or as the result of a contract entered into before, they became a New Zealand resident, including a transitional resident, who is not treated as non-resident under a double tax agreement; and
(iii)
the share is not listed on a recognised exchange; and
(iv)
no effective redemption facility for market value is available to the person for the share; and
(v)
less than 80% of the foreign company’s value is from shares that would not satisfy subparagraph (iii) or (iv); and
(b)
includes an attributing interest in a FIF that satisfies the criteria set out in paragraph (a), ignoring subparagraph (ii), if—
(i)
the person was an extended RAM taxpayer; and
(ii)
the interest was an extended RAM interest of the person; and
(iii)
the person ceased to be an extended RAM taxpayer; and
(iv)
the person continues to hold the interest.
Meaning of extended RAM interest
(7)
Extended RAM interest, for a person who is an extended RAM taxpayer, means an attributing interest in a FIF—
(a)
that is a share in a foreign company; and
(b)
any disposal of which is liable to tax under the laws of the country or territory outside New Zealand in which the person is liable to tax on the basis of citizenship or a right to work or live in that country or territory, being a country or territory with which New Zealand has a double tax agreement.
Meaning of excluded RAM interest
(8)
Excluded RAM interest, for a person, means a RAM interest or extended RAM interest for which the person—
(a)
chooses to use the attributable FIF income method under section EX 46(3); or
(b)
is required to use the comparative value method or deemed rate of return method, as applicable, under section EX 47 or EX 47B.
Meaning of RAM taxpayer
(9)
RAM taxpayer means—
(a)
a natural person who—
(i)
was non-resident or treated as non-resident under a double tax agreement for a continuous period of at least 5 years immediately before becoming New Zealand resident; and
(ii)
became New Zealand resident and not treated as non-resident under a double tax agreement on or after 1 April 2024; and
(iii)
is New Zealand resident and not treated as non-resident under a double tax agreement and is not a transitional resident; or
(b)
the trustee of a trust that—
(i)
has no gifting settlor who is not a natural person or deceased person; and
(ii)
at all times in the income year, is a complying trust for a distribution made at the time; and
(iii)
is mainly for the benefit of 1 or more natural persons for whom the gifting settlors of the trust have natural love and affection (or had natural love and affection when alive) or is mainly for the benefit of an organisation or trust with income that is exempt income under section CW 41 or CW 42 (which relate to the income of charities); and
(iv)
is not a superannuation scheme; and
(v)
has a principal settlor that satisfies the criteria set out in paragraph (a) at the time the trust chooses to use the revenue account method in accordance with subsection (2)(b).
Meaning of extended RAM taxpayer
(10)
Extended RAM taxpayer means—
(a)
a natural person who—
(i)
was non-resident or treated as non-resident under a double tax agreement for a continuous period of at least 5 years immediately before becoming New Zealand resident; and
(ii)
became New Zealand resident and not treated as non-resident under a double tax agreement on or after 1 April 2024; and
(iii)
is liable to tax in a country or territory outside New Zealand on the basis of citizenship or a right to work or live in that country or territory, being a country or territory with which New Zealand has a double tax agreement; or
(b)
a natural person who—
(i)
was previously an extended RAM taxpayer; and
(ii)
is liable to tax in a country or territory outside New Zealand on the basis of citizenship or a right to work or live in that country or territory, being a country or territory with which New Zealand has a double tax agreement; or
(c)
the trustee of a trust that—
(i)
satisfies the criteria set out in paragraph (b)(i) to (iv) of the definition of RAM taxpayer in subsection (9); and
(ii)
has a principal settlor that satisfies the criteria set out in paragraph (a) or (b) of this definition.
Transitional provision for transitional residents before 1 April 2024
(11)
For the purposes of subsections (9)(a)(ii) and (10)(a)(ii), a person is treated as becoming New Zealand resident on or after 1 April 2024 if the person became New Zealand resident before that date but was a transitional resident and only stopped being a transitional resident on or after 1 April 2024.
Defined in this Act: amount, attributing interest, comparative value method, complying trust, deemed rate of return method, double tax agreement, excluded RAM interest, exempt income, extended RAM interest, extended RAM taxpayer, FIF, FIF income, FIF loss, foreign company, gifting settlor, income, income year, loss, natural person, New Zealand, New Zealand resident, non-resident, principal settlor, RAM interest, RAM taxpayer, recognised exchange, revenue account method, share, superannuation scheme, tax, transitional resident, trustee
65 Section EX 51 amended (Comparative value method)
(1)
After section EX 51(8), insert:
Treatment of attributing interests subject to returning share transfer
(9)
For a person using the comparative value method to calculate FIF income for an attributing interest in a FIF that is an original share subject to a returning share transfer, the attributing interest is treated as being held by the share supplier, except if—
(a)
the share user is related to the share supplier:
(b)
the returning share transfer is, or is part of, a structured arrangement.
(2)
In section EX 51, list of defined terms, insert “original share”
, “related”
, “returning share transfer”
, “share supplier”
, “share user”
, and “structured arrangement”
.
(3)
Subsections (1) and (2) apply to a returning share transfer entered into on or after 1 April 2026.
66 Section EX 53 amended (Fair dividend rate periodic method)
(1)
In section EX 53(16C), replace “fair dividend rate annual method”
with “fair dividend rate periodic method”
.
(2)
In section EX 53, list of defined terms, delete “fair dividend rate annual method”
.
(3)
Subsections (1) and (2) apply for income years beginning on or after 1 July 2018.
67 Section EX 55 amended (Deemed rate of return method)
(1)
Replace section EX 55(4)(b) with:
(b)
deemed rate is the rate set by a determination made under section 91AAP of the Tax Administration Act 1994 for this section for the relevant income year.
(2)
Replace section EX 55(6)(c) with:
(c)
deemed rate is the rate set by a determination made under section 91AAP of the Tax Administration Act 1994 for this section for the relevant income year:
(3)
Repeal section EX 55(15).
68 New section EX 56B inserted (Revenue account method)
After section EX 56, insert:
EX 56B Revenue account method
When this section applies
(1)
This section applies if a person is using the revenue account method to calculate FIF income or loss from an attributing interest in a FIF for an income year.
Dividend income
(2)
The amount of any dividends derived by the person from the interest in the income year, including any foreign withholding tax or other amount that the person is allowed as a credit under section LE 1 (Tax credits for imputation credits) or LJ 2 (Tax credits for foreign income tax) in relation to those dividends, is FIF income of the person for the income year.
FIF income or loss on disposal
(3)
If the person disposes of the interest in the income year, the amount (the net disposal amount) calculated under subsection (4) or (10) is—
(a)
FIF income of the person if the amount is a positive number:
(b)
FIF loss of the person if the amount is a negative number.
Net disposal amount: standard calculation
(4)
The net disposal amount is the amount calculated using the formula—
(disposal proceeds − cost − foreign accruals) × 0.7.
Items in formula in subsection (4)
(5)
In the formula in subsection (4),—
(a)
disposal proceeds is the amount received by the person from disposing, or being treated as disposing, of the interest, including any foreign withholding tax or other amount that the person is allowed as a credit under section LJ 2 in relation to that amount received, determined under subsection (6):
(b)
cost is the amount of the expenditure the person incurs in acquiring the interest for the purpose of applying the revenue account method under this section:
(c)
foreign accruals is the total amount of any gains or losses from the interest determined under subsections (7) and (8) for periods when the person held the interest as a non-resident or a New Zealand resident who is treated as a non-resident under a double tax agreement or is a transitional resident starting on or after the date the person acquires the interest for the purpose of applying the revenue account method under this section.
Disposal proceeds
(6)
For the purposes of subsections (5)(a) and (11)(a), the disposal proceeds is,—
(a)
if the person has disposed of the interest during the income year, the amount received by the person from disposing of the interest, unless section GC 4 (Disposals and acquisitions of FIF attributing interests) applies; or
(b)
if the person has not disposed of the interest but is treated as having disposed of the interest during the income year, including under any of subsection (12) or section EX 63(2), (6), or (8), EX 65(6), EX 66B(2), or GC 4, the amount the person is treated as having received for the disposal under the relevant section.
Foreign accruals
(7)
For the purpose of subsection (5)(c), the foreign accruals for an interest for a period the person held the interest as a non-resident or a New Zealand resident who is treated as a non-resident under a double tax agreement or is a transitional resident is,—
(a)
if the period is the period in which the person acquired the interest before first becoming a New Zealand resident who is not treated as a non-resident under a double tax agreement and is not a transitional resident (a RAM resident), the market value of the interest on the date (the first residence date) the person first becomes a RAM resident less the cost of the interest; or
(b)
if the period is any other period in which the person is a non-resident between periods of being a RAM resident, the market value of the interest on the date (the residence date) the person becomes a RAM resident at the end of that period of non-residence less the market value of the interest on the date (the non-residence date) the person became a non-resident at the beginning of that period.
When market value must be obtained
(8)
For the purpose of subsection (7), the market value of the interest must be obtained before the later of—
(a)
the due date of the return for the income year in which the first residence date, the residence date, or the non-residence date, as applicable, falls; and
(b)
12 months from the first residence date, the residence date, or the non-residence date, as applicable.
When subsection (10) applies
(9)
Despite subsection (4), the net disposal amount is the amount calculated using the formula in subsection (10) if the interest is not a share that is listed on a recognised exchange and—
(a)
the person is unable to obtain a market value of the interest before the relevant date in subsection (8); or
(b)
the market value of the interest cannot be determined except by independent valuation and the person chooses not to obtain an independent valuation.
Net disposal amount: time-based apportionment
(10)
The net disposal amount is the amount calculated using the formula—
((disposal proceeds − cost) ÷ ownership period × FIF period) × 0.7.
Items in formula in subsection (10)
(11)
In the formula in subsection (10),—
(a)
disposal proceeds is the amount received by the person from disposing, or being treated as disposing, of the interest, including any foreign withholding tax or other amount that the person is allowed as a credit under section LJ 2 in relation to that amount received, determined under subsection (6):
(b)
cost is the amount of the expenditure the person incurs in acquiring the interest:
(c)
ownership period is the number of days in the period that starts on the day the person acquires the interest and ends on the day the person disposes of the interest:
(d)
FIF period is the number of days in the period that starts on the day the person first uses the revenue account method to calculate FIF income or loss for the interest and ends on the day the person disposes of the interest, excluding the number of days in that period on which the person is a non-resident.
Treatment as disposal on leaving New Zealand
(12)
Subject to subsection (16), if the person ceases to be New Zealand resident, the person is treated as having disposed of the interest immediately before the change in residence for an amount equal to its market value at that time.
When subsection (14) applies
(13)
Subsection (14) applies if the person has an amount of FIF income or loss under subsection (3) for an income year (the departure year) that arises because the person is treated as having disposed of the interest under subsection (12).
Suspended recognition of FIF income or loss
(14)
The amount of FIF income or loss is an amount of income or loss under section CQ 5 (When FIF income arises) or DN 6 (When FIF loss arises) for the person for the departure year only if the person actually disposes of the interest before the earlier of—
(a)
the date the person becomes New Zealand resident again; and
(b)
the date that is 3 years from the date the person ceased to be New Zealand resident.
Extension of time bar
(15)
If subsection (14) applies and the disposal referred to in that subsection takes place in an income year (the disposal year) that is later than the departure year, despite the time bar, the Commissioner may amend the person’s assessment for the departure year to the extent to which it relates to the person’s liability for tax on the FIF income or loss arising under subsection (3) at any time in the period that ends 4 years after the end of the disposal year.
No treatment as disposal if no actual disposal
(16)
The person is not treated as having disposed of the interest under subsection (12) if the person does not actually dispose of the interest before the earlier of—
(a)
the date the person becomes New Zealand resident again; and
(b)
the date that is 3 years from the date the person ceased to be New Zealand resident.
Treatment of attributing interests subject to returning share transfer
(17)
For a person using the revenue account method to calculate FIF income or loss for an attributing interest in a FIF that is an original share subject to a returning share transfer, the attributing interest is treated as being held by the share supplier, except if—
(a)
the share user is related to the share supplier:
(b)
the returning share transfer is, or is part of, a structured arrangement.
Dividends and disposals for extended RAM taxpayers
(18)
For the purposes of subsections (2) and (3) and a person who is an extended RAM taxpayer, if, in the absence of this subsection, the person would have an amount of FIF income or loss under subsection (2) or (3) from deriving a dividend from, or disposing of, the interest,—
(a)
the person is only treated as having derived a dividend from, or disposed of, the interest if the laws of the country or territory outside New Zealand in which the person is liable to tax in accordance with section EX 46B(10)(a)(iii) treats the person as having derived a dividend from, or disposed of, the interest; and
(b)
the laws of that other country or territory are applied to determine whether the person has derived a dividend from, or disposed of, the interest.
Defined in this Act: amount, assessment, attributing interest, dividend, double tax agreement, FIF, FIF income, FIF loss, foreign withholding tax, income year, market value, New Zealand, New Zealand resident, non-resident, original share, related, return, returning share transfer, revenue account method, share supplier, share user, structured arrangement, tax, time bar, transitional resident
69 Section EX 57 amended (Conversion of foreign currency amounts: most methods)
(1)
After section EX 57(1)(b)(iv), insert:
(v)
the revenue account method.
(2)
In section EX 57, list of defined terms, insert “revenue account method”
.
70 Section EX 59 amended (Codes: comparative value method, deemed rate of return method, fair dividend rate method, and cost method)
(1)
In the heading to section EX 59, replace “and cost method”
with “cost method, and revenue account method”
.
(2)
After section EX 59(1)(d), insert:
(e)
the revenue account method.
(3)
In section EX 59, list of defined terms, insert “revenue account method”
.
71 New section EX 59B inserted (Ring-fencing RAM net losses)
After section EX 59, insert:
EX 59B Ring-fencing RAM net losses
When this section applies
(1)
This section applies when a person has an amount of RAM net loss for an income year under section DN 8B (Ring-fencing cap on deduction: revenue account method).
Loss carried forward
(2)
The amount of RAM net loss is carried forward to the next tax year as the person’s RAM loss balance.
Use of RAM loss balance
(3)
A person’s RAM loss balance for a tax year must—
(a)
first be subtracted from their FIF income under section EX 56B, to the extent of that FIF income, for the tax year; and
(b)
second, to the extent of a remaining RAM loss balance, be carried forward to the following tax year.
Defined in this Act: amount, FIF income, income year, RAM loss balance, RAM net loss, tax year
72 Section EX 62 amended (Limits on changes of method)
(1)
In section EX 62(1), replace “(9)”
with “(8C)”
.
(2)
After section EX 62(2)(g), insert:
(h)
in the case of the revenue account method, section EX 46B(2) prevents its continued use.
(3)
After section EX 62(8), insert:
Change from revenue account method
(8B)
A person who uses the revenue account method to calculate FIF income or loss for the person’s attributing interests that are RAM interests or extended RAM interests may choose to change to another calculation method for an income year and all future income years. An election to change to any method other than the attributable FIF income method under this subsection is irrevocable.
Change to revenue account method
(8C)
A person may choose to change from another calculation method to the revenue account method for an attributing interest in a FIF only if—
(a)
the interest was either not previously a RAM interest or was an excluded RAM interest; and
(b)
at the time of the election, the interest satisfies all the criteria for a RAM interest set out in section EX 46B(6); and
(c)
the election is made for the first income year in which the interest satisfies paragraph (b); and
(d)
the person has never held an attributing interest in a FIF for which the person could have chosen to use the revenue account method under section EX 46B(2) and for which the person chose not to use that method, other than an excluded RAM interest.
(4)
Repeal section EX 62(9) and (10).
(5)
In section EX 62, list of defined terms,—
(a)
insert “excluded RAM interest”
, “extended RAM interest”
, “RAM interest”
, and “revenue account method”
; and
(b)
delete “accounting profits method”
and “branch equivalent method”
.
73 Section EX 63 amended (Consequences of changes in method)
(1)
In section EX 63(1)(a) and (b), replace “4”
with “5”
.
(2)
In section EX 63(1)(a), replace “or the cost method”
with “the cost method, or the revenue account method”
.
(3)
After section EX 63(5), insert:
Change from revenue account method to other cost-based methods
(6)
If a person holding an attributing interest in a FIF chooses to change from the revenue account method to 1 of the other cost-based calculation methods for calculating the FIF income or loss from the interest, the person is treated as having—
(a)
disposed of the interest to an unrelated person immediately before the start of the first income year to which the new method applies; and
(b)
reacquired the interest at the start of the income year; and
(c)
received for the disposal and paid for the reacquisition an amount equal to the market value of the interest at the time of the disposal.
Change to revenue account method from another cost-based method
(7)
If a person holding an attributing interest in a FIF chooses to change from 1 of the other cost-based calculation methods to the revenue account method for calculating the FIF income or loss from the interest, the person is treated as having—
(a)
disposed of the interest to an unrelated person immediately before the start of the first income year to which the revenue account method applies; and
(b)
reacquired the interest at the start of the income year; and
(c)
received for the disposal and paid for the reacquisition an amount equal to the market value of the interest at the time of the disposal.
Loss of extended RAM taxpayer status
(8)
If a person who is an extended RAM taxpayer ceases to be an extended RAM taxpayer, the person is treated as having—
(a)
disposed of all the person’s extended RAM interests that do not satisfy 1 or more of the criteria set out in section EX 46B(6)(a)(iii), (iv), and (v) to an unrelated person immediately before the person ceases to be an extended RAM taxpayer; and
(b)
reacquired those interests immediately after the person ceases to be an extended RAM taxpayer; and
(c)
received for the disposal and paid for the reacquisition an amount equal to the market value of those interests at the time of the disposal.
(4)
In section EX 63, list of defined terms, insert “extended RAM interest”
, “extended RAM taxpayer”
, “RAM interest”
, and “revenue account method”
.
74 Section EX 65 amended (Changes in application of FIF exemptions)
(1)
In section EX 65(1)(b)(i), replace “EX 43”
with “EX 43B”
.
(2)
In section EX 65(2), replace “or the cost method”
with “the cost method, or the revenue account method”
.
(3)
In section EX 65(5)(b)(i), replace “EX 43”
with “EX 43B”
.
(4)
In section EX 65(6), replace “fair dividend rate method, or cost method”
with “the fair dividend rate method, the cost method, or the revenue account method”
.
(5)
In section EX 65, list of defined terms, insert “revenue account method”
.
75 Section EX 68 amended (Measurement of cost)
(1)
After section EX 68(1)(e), insert:
(f)
the revenue account method.
(2)
In section EX 68, list of defined terms, insert “revenue account method”
.
76 Section EX 71 amended (Non-market transactions in FIF interests)
(1)
In section EX 71, replace “or the cost method”
with “the cost method, or the revenue account method”
.
(2)
In section EX 71, list of defined terms, insert “revenue account method”
.
77 Section EY 11 amended (Superannuation schemes providing life insurance)
(1)
In section EY 11(2), replace “(3) to (9)”
with “(3) to (8)”
.
(2)
After section EY 11(5)(a), insert:
(ab)
a fund approved by the Financial Markets Authority for the purposes of this subsection as providing benefits solely to those who (in the absence of a transfer under section 179 of the Financial Markets Conduct Act 2013) would otherwise be members or beneficiaries of a restricted scheme (within the meaning of section 6(1) of the Financial Markets Conduct Act 2013) that meets the requirements of paragraph (a):
(3)
Repeal section EY 11(9) and (12).
78 New section EZ 32H inserted (Person using another method for RAM interest before 1 April 2025)
After section EZ 32G, insert:
EZ 32H Person using another method for RAM interest before 1 April 2025
When this section applies
(1)
This section applies, for a person and an attributing interest in a FIF, if—
(a)
the person became New Zealand resident on or after 1 April 2024 and before 1 April 2025; and
(b)
the person met the tests in section CQ 5 (When FIF income arises) or DN 6 (When FIF loss arises) and calculated the FIF income or loss from the interest under the attributable FIF income method, the comparative value method, the deemed rate of return method, the fair dividend rate method, or the cost method for the 2024–25 income year; and
(c)
the person would have been a RAM taxpayer or an extended RAM taxpayer, and the interest would have been a RAM interest or an extended RAM interest, for the 2024–25 income year if section EX 46B (Limits on choice of revenue account method) came into force on 1 April 2024; and
(d)
the person is a RAM taxpayer or extended RAM taxpayer, and the interest is a RAM interest or extended RAM interest, on 1 April 2025.
Treated as meeting tests for election of RAM method on 1 April 2025
(2)
For the purposes of section EX 46B(2)(b), the person is treated as first meeting the tests in section CQ 5 or DN 6 for that interest on 1 April 2025.
Defined in this Act: attributable FIF income method, attributing interest, comparative value method, deemed rate of return method, extended RAM interest, extended RAM taxpayer, FIF, FIF income, FIF loss, income year, New Zealand resident, RAM interest, RAM taxpayer
79 Section FB 1B amended (Meaning of settlement of relationship property and property)
In section FB 1B(a)(i), replace “:”
with “; and”
.
80 Section FC 9 amended (Residential land transferred to executor, administrator, or beneficiary on death of person)
In section FC 9(2), replace “CB 6A(5)(c)”
with “CB 6A(5)(b)(iii)”
.
81 Section FE 2 amended (When this subpart applies)
(1)
After section FE 2(1), insert:
Persons to whom this subpart does not apply
(1BA)
Despite subsection (1), this subpart does not apply, except to the extent provided in section FE 7B or FE 7C, to public project debt or an eligible infrastructure entity when a person chooses to apply section FE 7B or FE 7C.
(2)
In section FE 2, list of defined terms, insert “eligible infrastructure entity”
and “public project debt”
.
(3)
Subsections (1) and (2) apply for the 2026–27 and later income years.
82 New section FE 7C inserted (Exemption for eligible infrastructure)
(1)
After section FE 7B, insert:
FE 7C Exemption for eligible infrastructure
When this section applies
(1)
This section applies, for a person and an income year, when the person—
(a)
meets the requirements of section FE 2(1)(b), (c), or (cc); and
(b)
is an eligible infrastructure entity for the income year; and
(c)
has qualifying infrastructure debt for the income year; and
(d)
chooses, in a form and manner approved by the Commissioner, for this section to apply to them for the income year; and
(e)
has not chosen to apply section FE 7B.
Non-application of subpart
(2)
Subpart FE does not apply to an eligible infrastructure entity except to the extent necessary to give effect to this section.
Amounts relating to eligible infrastructure entity excluded
(3)
For the purposes of applying this subpart to any other person, the following are excluded:
(a)
the debt, interest, assets, and non-debt liabilities of the eligible infrastructure entity; and
(b)
any asset to the extent it represents a direct or indirect interest in the eligible infrastructure entity (including, for example, goodwill).
Income
(4)
If the eligible infrastructure entity incurs interest on debt that is not qualifying infrastructure debt or issues fixed-rate foreign equity or fixed-rate shares, the person is treated as deriving an amount of income under section CH 10C (Interest apportionment: non-qualifying infrastructure debt) calculated using the following formula:
non-QID interest + FRD.
Items in formula
(5)
In the formula in subsection (4),—
(a)
non-QID interest is the total amount of interest incurred by the eligible infrastructure entity for the income year on debt that is not qualifying infrastructure debt:
(b)
FRD is the total amount of dividends paid by the eligible infrastructure entity, for the income year, for fixed-rate foreign equity or fixed-rate shares issued by the eligible infrastructure entity and held by a person resident in New Zealand.
Qualifying infrastructure group
(6)
A qualifying infrastructure group is treated as a single person for the purposes of this section if, for the income year, the group, treated as if it were a single entity and disregarding intra-group balances, meets the definition of eligible infrastructure entity, except for paragraph (d).
Definition of eligible infrastructure entity
(7)
In this section and section FE 2, eligible infrastructure entity means a person—
(a)
that carries on a business or project consisting of—
(i)
creating, operating, maintaining, or upgrading qualifying infrastructure assets the person owns; and
(ii)
any activity in New Zealand that is ancillary to or facilitates the activities described in subparagraph (i), if the person carries on any such activity; and
(b)
whose assets, to the extent they are used in, or for the purposes of, the business or project referred to in paragraph (a), comprise at least 95% of the total value of the person’s assets recognised in its balance sheet for the income year and include—
(i)
tangible assets:
(ii)
intangible assets:
(iii)
financial assets to which the person is a party:
(iv)
goodwill:
(v)
deferred tax assets; and
(c)
that does not have—
(i)
a permanent establishment outside New Zealand:
(ii)
an interest in a foreign investment fund, controlled foreign company, partnership, or a trust in a foreign jurisdiction:
(iii)
an asset situated outside New Zealand, other than an asset that is held in relation to the business or project described in paragraph (a) and is 1 or more of the following:
(A)
a hedging arrangement:
(B)
minor:
(C)
situated outside New Zealand for maintenance:
(D)
situated outside New Zealand other than for maintenance for a cumulative period of no more than 6 months; and
(d)
despite paragraphs (a) to (c), that has a right to impose levies under an Order in Council under the Infrastructure Funding and Financing Act 2020.
Definition of qualifying infrastructure asset
(8)
In this section, qualifying infrastructure asset—
(a)
means a tangible asset located in New Zealand that provides, or is integral to providing, essential services to the public or a class of users on a shared-use basis that is similar in nature to the following types of assets, and includes the following types of assets:
(i)
transport infrastructure (for example, roads, rail, ports, airports, and ferries); and
(ii)
energy infrastructure (for example, electricity generation, transmission, and distribution assets); and
(iii)
water infrastructure (for example, water supply, wastewater, and stormwater systems); and
(iv)
telecommunication infrastructure (for example, fibre networks, data centres, and communication towers); and
(v)
waste infrastructure (for example, recycling facilities and landfills); and
(vi)
social infrastructure (for example, hospitals, schools, libraries, prisons, large-scale student accommodation, or similar public facilities); and
(b)
despite paragraph (a), includes a tangible asset described in that paragraph that provides, or is integral to providing, an essential service that is not provided on a shared-use basis if—
(i)
the service is of a kind that is ordinarily provided on a shared-use basis to the public or a class of users; and
(ii)
the absence of shared use arises solely because the service is supplied to a single user or a small group of users under contractual arrangements; and
(c)
does not include—
(i)
commercial buildings (for example, offices, supermarkets, and shopping malls); and
(ii)
industrial buildings (for example, factories); and
(iii)
dwellings.
Definition of qualifying infrastructure debt
(9)
In this section, qualifying infrastructure debt means, for the eligible infrastructure entity, debt for which, for the income year, all the following are satisfied:
(a)
the debt is applied to the eligible infrastructure entity’s business or project; and
(b)
the debt is third-party debt; and
(c)
the debt is limited-recourse debt.
Definition of third-party debt
(10)
In this section, third-party debt—
(a)
means debt where the funds are provided by a person who is not—
(i)
a person with a direct or indirect ownership interest in the borrower:
(ii)
an associated person of a person described in subparagraph (i); and
(b)
despite paragraph (a) and subject to paragraph (c), includes debt when the funds are provided by a person who, if the eligible infrastructure entity is a listed company,—
(i)
is a shareholder of the listed company and holds, together with any associated persons, 5% or less of the shares in the listed company:
(ii)
is an associate of a shareholder described in subparagraph (i), if the shareholder holds, together with any associated persons, 5% or less of the shares in the listed company; and
(c)
excludes debt if a person described in paragraph (a)(i), or an associated person of that person, provides the funds or pays the money, directly or indirectly, to another person (the direct lender) who provides funds to the borrower, and the arrangement has the purpose or effect of enabling the funds to be provided to the borrower, or of reimbursing or compensating the direct lender for providing the funds; and
(d)
excludes debt that—
(i)
is convertible into shares, other equity interests, or partner’s interests of the borrower or an associated person:
(ii)
provides for any return calculated by reference to profits, cashflows, or distributions of the borrower or an associated person:
(iii)
entitles the lender to any amount from the borrower or an associated person beyond repayment of principal and accrued interest on the debt, other than fees, charges, or expenses payable to the lender in connection with the debt; and
(e)
excludes debt if the funds are provided, directly or indirectly, by a partner to a partnership to the extent the partnership is the borrower.
Definition of limited-recourse debt
(11)
In this section, limited-recourse debt means debt that, in the event of default, the lender’s recourse is limited to—
(a)
the assets and income of the eligible infrastructure entity, including—
(i)
shares in the eligible infrastructure entity, if the entity is a New Zealand company:
(ii)
in the case of an eligible infrastructure entity that is a partner in a partnership, the assets and income only of the partnership giving rise to the eligible infrastructure entity, and any interests in that partnership, but not the assets and income that do not form part of the partnership; and
(b)
recourse provided, or to be provided, under an equity commitment document or a letter of credit that—
(i)
relates to the construction or creation of a new qualifying infrastructure asset by an eligible infrastructure entity that was established primarily for the purpose of creating or constructing that asset; and
(ii)
is for a specified amount of equity that does not exceed the amount reasonably required to obtain the loan to construct or create the qualifying infrastructure asset; and
(iii)
applies for a period that does not extend beyond the construction period; and
(c)
if paragraph (d) of the definition of eligible infrastructure entity applies,—
(i)
the benefit of a guarantee or other assurance from the Crown in connection with the right to impose levies; and
(ii)
the benefit of a security or a guarantee from a third party over that third party’s assets, to the extent the security or guarantee applies only during the construction period and relates solely to the construction or creation of a qualifying infrastructure asset.
Definition of non-debt liabilities
(12)
In this section, non-debt liabilities means the portion of the total group non-debt liabilities calculated under section FE 16B(1) or (2), as applicable, to the extent to which they relate to the eligible infrastructure entity.
Definition of qualifying infrastructure group
(13)
In this section, qualifying infrastructure group means—
(a)
a wholly-owned group of companies:
(b)
a subset of a wholly-owned group of companies that chooses to be treated as a group for the purposes of this section if—
(i)
the subset includes every company in the wholly-owned group that is wholly owned by a member of the subset; and
(ii)
no member of the subset has an ownership interest in an entity that is not a member of the subset.
Defined in this Act: amount, associated person, commercial building, Commissioner, company, dividend, eligible infrastructure entity, fixed-rate foreign equity, fixed-rate share, foreign-sourced amount, income, income year, interest, limited-recourse debt, listed company, non-debt liabilities, ownership interest, partner’s interests, qualifying infrastructure asset, qualifying infrastructure debt, qualifying infrastructure group, third-party debt, wholly-owned group of companies
(2)
Subsection (1) applies for the 2026–27 and later income years.
83 Section FO 2 amended (Amalgamation rules)
(1)
In section FO 2(b), after “CD 44(8)”
, insert “and (8BA)”
.
(2)
Subsection (1) applies for the 2008–09 and later income years.
84 Section GC 4 amended (Disposals and acquisitions of FIF attributing interests)
(1)
In section GC 4(1)(b) and (3)(b), replace “or the cost method”
with “the cost method, or the revenue account method”
.
(2)
In section GC 4, list of defined terms, insert “market value”
and “revenue account method”
.
85 Section HC 25 amended (Foreign-sourced amounts: non-resident trustees)
Repeal section HC 25(2)(c).
86 Section HL 10 amended (Further eligibility requirements relating to investments)
After section HL 10(2)(b)(vii), insert:
(viib)
an amount derived from validating cryptoasset transactions through a proof of stake consensus mechanism or otherwise using cryptoassets to generate a reward:
87 Section HM 12 amended (Income types)
After section HM 12(1)(b)(ix), insert:
(ixb)
an amount derived from validating cryptoasset transactions through a proof of stake consensus mechanism or otherwise using cryptoassets to generate a reward:
88 Section HM 27 amended (When multi-rate PIE no longer meets investor interest adjustment requirements)
(1)
Before section HM 27(1), insert the heading:
Loss of PIE status
(2)
In section HM 27, insert as subsection (2):
Exception
(2)
Despite subsection (1), the Commissioner may determine that a multi-rate PIE does not cease to be a PIE because of a breach of section HM 48 if the Commissioner is satisfied that the breach—
(a)
arose despite the PIE taking reasonable care; and
(b)
does not have a material impact on any investor in the PIE; and
(c)
is not part of a pattern of non-compliance.
(3)
In section HM 27, list of defined terms, insert “Commissioner”
, “investor”
, “multi-rate PIE”
, and “PIE”
.
89 Section HM 35 amended (Determining net amounts and taxable amounts)
In section HM 35(8)(b), replace “makes”
with “make”
.
90 Section HM 35B amended (Treatment of certain provisions made by multi-rate PIEs)
(1)
In section HM 35B(2)(b), after “or loss,”
, insert “other than expenditure described in paragraph (c),”
.
(2)
After section HM 35B(2)(b), insert:
(c)
for future expenditure incurred in acquiring an identical share under a returning share transfer, the amount that, when incurred, would be a deduction under section HM 35(3)(b).
(3)
In section HM 35B, list of defined terms, insert “identical share”
and “returning share transfer”
.
(4)
Subsections (1), (2), and (3) apply to returning share transfers entered into on or after 1 April 2026.
91 Section HP 4 amended (Meaning of terms defined in global anti-base erosion model rules)
In section HP 4, after “subpart”
, insert “and section HZ 13 (Transitional rule for application of global anti-base erosion model rules)”
.
92 Section HR 8 amended (Transitional residents)
(1)
After section HR 8(2), insert:
Treatment of non-resident visitors
(2B)
For the purposes of determining if a person is a transitional resident under subsection (2), if the person is a non-resident visitor, section YD 1(3) is applied as modified by section YD 1(13) and (14).
(2)
In section HR 8, list of defined terms, insert “non-resident visitor”
.
93 Section HR 9BAA amended (Meaning of originator)
(1)
In section HR 9BAA(3)(a), delete “debt funding”
.
(2)
Replace section HR 9BAA(3)(b) with:
(b)
prepares consolidated financial statements that include the assets referred to in paragraph (a) or is a member of the same wholly-owned group of companies as another person who prepares consolidated financial statements that include those assets.
94 Section HR 9BA amended (Elections to treat debt funding special purpose vehicles as transparent)
(1)
Replace section HR 9BA(1)(b) with:
(b)
returning income derived and expenditure incurred by the special purpose vehicle in the originator’s first return of income filed after—
(i)
the first transfer of assets by the originator to the special purpose vehicle:
(ii)
the first date on which the special purpose vehicle holds an attributed asset of the originator as described in section HR 9BAA(3).
(2)
In section HR 9BA(2)(c), replace “a special purpose vehicle”
with “a debt funding special purpose vehicle”
.
95 Section HR 10 amended (What happens when vehicle stops being transparent debt funding special purpose vehicle?)
(1)
In section HR 10(1)(a), replace “HR 9(b)”
with “HR 9(3)(c)”
and “a special purpose vehicle”
with “a debt funding special purpose vehicle”
.
(2)
In section HR 10(1)(b), replace “a special purpose vehicle”
with “a debt funding special purpose vehicle”
.
(3)
In section HR 10(1)(c), replace “HR 9(c)”
with “HR 9(3)(d)”
and “a special purpose vehicle”
with “a debt funding special purpose vehicle”
.
(4)
In section HR 10(1)(d), replace “a special purpose vehicle”
with “a debt funding special purpose vehicle”
.
96 Section HR 10B amended (What happens when persons stop being originators?)
(1)
In section HR 10B(1), words before the paragraphs, after “asset referred to in section HR 9(1)”
, insert “or an arrangement, including any liability under that arrangement, described in section HR 9(3)(d)”
.
(2)
Replace section HR 10B(2)(a) with:
(a)
they acquired and held the assets, were party to the arrangements, or incurred the liabilities of the first originator, each on the same basis as the first originator:
(3)
(a)
after “asset”
, insert “, arrangement, or liability”
; and
(b)
delete “that is a financial arrangement or excepted financial arrangement”
.
(4)
In section HR 10B(3), replace “as if they were not an originator for the assets and arrangements referred to in subsection (2)”
with “from the originator transition date as if they were not an originator for the assets, arrangements, or liabilities referred to in subsection (2)”
.
(5)
Replace section HR 10B(4), other than the heading, with:
(4)
For the purposes of section HR 9, the first originator is treated from the originator transition date as not—
(a)
acquiring or holding the assets:
(b)
having been party to the arrangements:
(c)
incurring the liabilities.
(6)
In section HR 10B(5),—
(a)
replace “a special purpose vehicle and an asset”
with “a debt funding special purpose vehicle and an asset, arrangement, or liability”
; and
(b)
after “is treated”
, insert “from the originator transition date”
.
(7)
After section HR 10B(5), insert:
Meaning of originator transition date
(5B)
In this section, originator transition date means—
(a)
the breach date; or
(b)
the start of the income year that includes the breach date if the first originator and the second originator jointly notify the Commissioner in writing that they choose to apply this paragraph—
(i)
within 20 working days of the breach date; or
(ii)
by a later date approved by the Commissioner.
Tax positions adopted by first originator when originator transition date is the start of an income year
(5C)
For the purposes of the Inland Revenue Acts, to the extent attributable to the relevant debt funding special purpose vehicle and the part of the income year ending on the breach date, if the originator transition date is the start of the income year that includes the breach date,—
(a)
the second originator is treated as having filed all returns, provided all information, and made all payments under the Inland Revenue Acts that were filed, provided, or made by the first originator; and
(b)
the second originator assumes all liabilities of the first originator under the Inland Revenue Acts in connection with any filings made or tax positions adopted by the first originator.
(8)
In section HR 10B(8), after “1985”
, insert “or otherwise result in any deemed disposal or transfer of any assets, arrangements, or liabilities by the first originator for the purposes of any Inland Revenue Act”
.
(9)
In section HR 10B, list of defined terms, insert “originator transition date”
.
97 Section HZ 9 amended (Elections to treat existing debt funding special purpose vehicles as transparent)
(1)
In section HZ 9(1), replace “the day after the date on which the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 receives the Royal assent”
with “30 March 2025”
.
(2)
Replace section HZ 9(2) with:
(2)
An originator makes an election referred to in section HR 9 (Debt funding special purpose vehicles are transparent if election made by originator) for an income year starting on or after 18 March 2019 by,—
(a)
before the return of income referred to in paragraph (b), notifying the Commissioner that the originator chooses to have the liabilities and obligations referred to in section HR 9 that the special purpose vehicle would have in the absence of the election; or
(b)
returning income derived and expenditure incurred by the special purpose vehicle in their return of income for the income year.
98 Section HZ 10 amended (What happens when election is made under section HZ 9?)
(1)
Replace section HZ 10(1)(b) with:
(b)
immediately before the election has effect, the special purpose vehicle holds property or is party to an arrangement that, immediately after the election has effect, the originator is treated as holding or being party to.
(2)
In section HZ 10(2), replace “income year in which”
with “income year for which”
.
(3)
In section HZ 10(2)(a), replace “financial arrangement or excepted financial arrangement”
with “property, or been party to the arrangement,”
.
(4)
In section HZ 10(2)(b), replace “financial arrangement or excepted financial arrangement”
with “property or arrangement”
.
(5)
In section HZ 10(2)(c), replace “financial arrangement or excepted financial arrangement”
with “property or arrangement”
.
(6)
In section HZ 10(4), after “1985”
, insert “, or otherwise result in any deemed disposal or transfer of any assets, arrangements, or liabilities by the originator for the purposes of any Inland Revenue Act”
.
99 New section HZ 12 inserted (Amalgamation of Crown Research Institutes)
After section HZ 11, insert:
HZ 12 Amalgamation of Crown Research Institutes
Deemed continuity
(1)
Each Crown Research Institute that amalgamated on 1 July 2025 and the resulting amalgamated entity are treated as the same person.
Clarification of separate identity pre-amalgamation
(2)
For the avoidance of doubt, nothing in subsection (1) treats 2 or more amalgamating Crown Research Institutes as the same person at any time.
Certain changes to interests ignored
(3)
For the purposes of sections IA 5, IC 3, IE 2, IE 3 (which relate to continuity rules for tax losses and grouping), and any other section that depends on interests measured under subpart YC (Measurement of company ownership), any of the following changes to the interests in a company that arise solely because of an amalgamation referred to in subsection (1) are ignored:
(a)
a change to the identity of a shareholder:
(b)
a change to the measurement of a voting interest, market value circumstance, market value interest, or option as measured under subpart YC.
Defined in this Act: company, Crown Research Institute, market value circumstance, market value interest, option, shareholder, voting interest
100 New section HZ 13 inserted (Transitional rule for application of global anti-base erosion model rules)
After section HZ 12, insert:
HZ 13 Transitional rule for application of global anti-base erosion model rules
When this section applies
(1)
This section applies for a person and the fiscal year that begins on or after—
(a)
1 January 2026 if the person has a fixed balance date; or
(b)
26 December 2025 if the person has a 52–53 week Fiscal Year.
Application of global anti-base erosion model rules
(2)
For the purposes of section HP 3(3)(b)(ii) (Application of global anti-base erosion model rules), the side-by-side package guidance published by the OECD in January 2026—
(a)
is treated as if it were published before the start of the fiscal year; and
(b)
any reference in the guidance to “Fiscal Years commencing on or after 1 January 2026” should be read as “Fiscal Years commencing on or after 1 January 2026, or on or after 26 December 2025 for an MNE Group with a 52–53 week Fiscal Year,”; and
(c)
any reference in the guidance to “Fiscal Years commencing before 1 January 2026” should be read as “Fiscal Years commencing before 1 January 2026, or before 26 December 2025 for an MNE Group with a 52–53 week Fiscal Year”.
Some definitions
(3)
In this section,—
52–53 week Fiscal Year means an accounting period of 52 or 53 weeks, determined by reference to a specific day in a 12-month period
side-by-side package guidance means the guidance set out in Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-base Erosion Model Rules (Pillar Two), Side-by-Side Package, Inclusive Framework on BEPS, as amended from time to time.
Defined in this Act: 52–53 week Fiscal Year, global anti-base erosion model rules, side-by-side package guidance
101 Section IA 7 amended (Restrictions relating to ring-fenced tax losses)
(1)
After section IA 7(6), insert:
RAM net losses
(6B)
The general rules do not apply to a RAM net loss. The provision that deals with this loss is section EX 59B (Ring-fencing RAM net losses).
(2)
In section IA 7, list of defined terms, insert “RAM net loss”
.
102 Section LD 1 amended (Tax credits for charitable or other public benefit gifts)
In section LD 1(3), replace “year.”
with “year, limited to the amount of the person’s taxable income for that tax year.”
103 Section LE 1 amended (Tax credits for imputation credits)
In section LE 1(4B), replace “and cost method”
with “cost method, and revenue account method”
.
104 Section LJ 2 amended (Tax credits for foreign income tax)
In section LJ 2(6), replace “and cost method”
with “cost method, and revenue account method”
.
105 Section MD 10 amended (Calculation of in-work tax credit)
(1)
In section MD 10(3)(a), replace “5,070”
with “7,670”
.
(2)
In section MD 10(3)(a), replace “7,670”
with “5,070”
.
106 New section MF 4L inserted (Calculation of instalments: 2026–27 tax year)
After section MF 4K, insert:
MF 4L Calculation of instalments: 2026–27 tax year
When this section applies
(1)
This section applies for calculating the amount of an instalment by way of tax credit under section MD 1 (Abating WFF tax credit) for the 2026–27 tax year if section 105(2) of the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026 comes into force on a date (the change date) that is set by Order in Council under section 2(43) of that Act.
In-work tax credit formula: section MD 10
(2)
The instalments for the tax credit under section MD 1, for the calculation of the in-work tax credit, are calculated using the formula—
(amount A + amount B × (children − 3)) × weekly periods ÷ 52.
Items in formula
(3)
In the formula in subsection (2),—
(a)
amount A is—
(i)
for the period starting on 1 April 2026 and finishing on the day before the change date, $7,670:
(ii)
for the period starting on the change date and finishing on 31 March 2027, $5,070:
(b)
amount B is $780:
(c)
children is the greater of—
(i)
3; and
(ii)
the number of children for whom the person is allowed the in-work tax credit:
(d)
weekly periods,—
(i)
for 2 or more entitlement periods forming 1 continuous period, is the number of whole periods of 1 week in the continuous period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) (Fifth requirement: earner) refers or is an earner described in section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies:
(ii)
for an entitlement period to which subparagraph (i) does not apply, is the number of whole periods of 1 week in the entitlement period for which the person or their spouse, civil union partner, or de facto partner has, from the work activity, income to which section MD 9(2) refers or is an earner described in section MD 9(1)(b), and includes whole periods of 1 week to which the alternative requirement in section MD 9(6) applies.
Defined in this Act: amount, child, civil union partner, de facto partner, earner, entitlement period, in-work tax credit, spouse, tax credit, tax year
107 New section MH 6 inserted (Orders in Council for FamilyBoost)
After section MH 5, insert:
MH 6 Orders in Council for FamilyBoost
Purpose
(1)
The purpose of subsection (2) is to provide a power to expand eligibility to, or increase the amount of, the FamilyBoost tax credit payable to a person under this subpart.
What may be done by Order in Council
(2)
The Governor-General may, by Order in Council made on the recommendation of the Minister of Revenue,—
(a)
increase the percentage of licensed early childhood service fees able to be claimed as a FamilyBoost tax credit in section MH 3(2):
(b)
increase the maximum tax credit amount in section MH 3(2) and (3):
(c)
change the rate of abatement in section MH 5(2):
(d)
increase the abatement amount under section MH 5(3):
(e)
increase the threshold for a person’s tax credit income in a tax credit quarter in section MH 5(3):
(f)
increase the tax credit income threshold at which the abatement begins under sections MH 3(3) and MH 5(2).
Application of Order in Council
(3)
An Order in Council made under subsection (2) applies to tax credit quarters starting on or after the first day of a quarter and cannot apply earlier than the quarter in which the order is made.
Secondary legislation
(4)
An Order in Council made under subsection (2)—
(a)
is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements); and
(b)
commences in accordance with subsection (3), even if it is not yet published.
Defined in this Act: FamilyBoost tax credit, licensed early childhood service fees, quarter, tax credit income, tax credit quarter
| Legislation Act 2019 requirements for secondary legislation made under this section | ||||
| Publication | PCO must publish it on the legislation website and notify it in the Gazette | LA19 s 69(1)(c) | ||
| Presentation | The Minister must present it to the House of Representatives | LA19 s 114 | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
108 Section MK 2 amended (Eligibility requirements)
In section MK 2(1)(cb), replace “clause 12B of the KiwiSaver scheme rules”
with “schedule 1, clause 12B of the KiwiSaver Act 2006”
.
109 Section RA 13 amended (Payment dates for terminal tax)
(1)
After section RA 13(2), insert:
(2B)
Despite subsection (2), if the person is a person to whom section RC 3(2)(e) or (f) applies, the person’s terminal tax for a tax year is due and payable on the date that would be the final instalment date of provisional tax for the tax year if the person were liable to pay provisional tax.
(2)
Subsection (1) applies for the 2026–27 and later income years.
110 Section RA 21 amended (Regulations)
(1)
In section RA 21(1)(c), replace “class or persons”
with “class of persons”
.
(2)
Repeal section RA 21(3) and (4).
(3)
In section RA 21, list of defined terms, delete “employment-related loan”
, “interest”
, “prescribed rate of interest”
, and “quarter”
.
111 Section RC 3 amended (Who is required to pay provisional tax?)
(1)
After section RC 3(2)(d), insert:
(e)
the Crown as owner of the New Zealand Superannuation Fund and the VCF:
(f)
a company treated as being wholly owned by the Crown under section HR 4B(3) (Activities relating to New Zealand Superannuation Fund and Venture Capital Fund).
(2)
In section RC 3, list of defined terms, insert “VCF”
.
(3)
Subsections (1) and (2) apply for the 2026–27 and later income years.
112 Section RC 38 amended (Crediting income tax with early-payment discount)
In section RC 38(4)(a), replace “an Order in Council”
with “a determination”
.
113 Section RD 5 amended (Salary or wages)
After section RD 5(1), insert:
Exclusion for specified contractors and other non-employees
(1B)
Despite subsection (1), an amount is not salary or wages if it is a payment made to a person who is—
(a)
a specified contractor, as defined in section 6 of the Employment Relations Act 2000; or
(b)
not an employee under that section because their employment status is determined as other than an employee under another Act.
114 Section RD 7 amended (Extra pay)
After section RD 7(1), insert:
Exclusion for specified contractors and other non-employees
(1B)
Despite subsection (1), an amount is not an extra pay if it is a payment made to a person who is—
(a)
a specified contractor, as defined in section 6 of the Employment Relations Act 2000; or
(b)
not an employee under that section because their employment status is determined as other than an employee under another Act.
115 Section RD 8 amended (Schedular payments)
(1)
After section RD 8(1)(b)(vi), insert:
(vii)
an amount of exempt income of a non-resident visitor under section CW 22B (Amounts derived by non-resident visitors during visits); or
(viii)
an amount of exempt income of a non-resident under section CW 22C (Amounts derived by non-residents from non-resident visitors in New Zealand).
(2)
In section RD 8, list of defined terms, insert “exempt income”
, “non-resident”
, and “non-resident visitor”
.
116 Section RD 20B amended (Treatment of certain support payments made for period of more than 1 year)
(1)
In section RD 20B, replace the section heading with “Treatment of certain support payments for period of more than 365 days”
.
(2)
In section RD 20B(1), replace “1 income year”
with “365 consecutive days”
.
(3)
Subsections (1) and (2) apply to a person for payments made on or after 1 April 2024. However, subsection (2) does not apply to a person in relation to a tax position taken by the person—
(a)
in the period that starts on 1 April 2024 and ends on the day after the date on which the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026 receives the Royal assent; and
(b)
relying on section RD 20B as it was before the amendment made by subsection (2).
117 New section RD 38B inserted (Gift cards)
After section RD 38, insert:
RD 38B Gift cards
The value of a benefit that an employer provides to their employee by way of a gift card is the amount loaded on the card.
Defined in this Act: employee, employer, gift card
118 Section RD 45 amended (Unclassified benefits)
(1)
In the heading to section RD 45, after “benefits”
, insert “and gift cards”
.
(2)
After section RD 45(1), insert:
Gift cards
(1B)
For the purposes of this section, a gift card is treated as an unclassified benefit and a benefit.
(3)
In section RD 45(2)(b), after “unclassified benefits”
, insert “or benefits”
.
(4)
In section RD 45(3)(b), after “unclassified benefits”
, insert “or benefits”
.
(5)
Replace section RD 45(4)(c) with:
(c)
benefits provided by the employer to employees of persons associated, at any time in the relevant period, with the employer when the benefits would be unclassified benefits if provided to an employee of the employer:
(6)
Replace section RD 45(4)(d) with:
(d)
if the employer is a company, benefits provided by other companies that are, at any time in the relevant period, part of the same group of companies as the employer to employees of those other companies when the benefits would be unclassified benefits if provided to an employee of the employer.
(7)
In section RD 45(5)(b), after “unclassified benefits”
, insert “or benefits”
.
(8)
Subsections (3), (4), (5), (6), and (7) apply for the 2022–23 and later income years. However, subsections (3), (4), (5), (6), and (7) do not apply to a person in relation to a tax position taken by the person—
(a)
in the period that starts on the first day of the 2022–23 income year and ends on 26 August 2025; and
(b)
relying on section RD 45 as it was before the amendments made by subsections (3) to (7).
119 Section RD 47 amended (Attribution of certain fringe benefits)
(1)
In section RD 47(1)(d), after “(Meaning of fringe benefit)”
, insert “or gift cards under section CX 16B (Gift cards), or both,”
.
(2)
In section RD 47, list of defined terms, insert “gift card”
.
120 Section RD 49 amended (Application of thresholds to attributed benefits)
(1)
In section RD 49(2), replace “RD 47(1)(c) and (d)”
with “RD 47(1)(c) or (d)”
.
(2)
After section RD 49(3), insert:
Exception for specified insurance premiums paid for all employees
(3B)
Despite section RD 47(1)(c)(v), if the employer pays a specified insurance premium or makes a contribution to the insurance fund of a friendly society for the benefit of an employee under section CX 16 (Contributions to life or health insurance) with a taxable value over the threshold, they may pool the value of the benefit under section RD 53 if all their employees have the same or a similar entitlement to the benefit.
121 Section RD 50 amended (Employer’s liability for attributed benefits)
(1)
In section RD 50(6)(b)(ii), replace “129,681”
with “130,724”
.
(2)
Subsection (1) applies for the 2025–26 and later income years.
122 Section RD 53 amended (Pooling non-attributed benefits)
After section RD 53(1)(e), insert:
(f)
payment of an insurance premium or contribution to an insurance fund to which section RD 49(3B) applies.
123 Section RD 64 amended (ESCT rules and their application)
(1)
After section RD 64(2), insert:
Exception for non-resident visitors
(3)
Despite subsection (2), the ESCT rules do not apply to an employer of, or a person who makes an employer’s superannuation cash contribution for the benefit of, a person who is a non-resident visitor.
(2)
In section RD 64, list of defined terms, insert “non-resident visitor”
.
124 Section RE 10B amended (Amounts withheld from distributions to holders of FIF attributing interests)
In section RE 10B(1)(b), replace “and cost method”
with “cost method, and revenue account method”
.
125 Section RF 3 amended (Obligation to withhold amounts of tax for non-resident passive income)
(1)
In section RF 3(1E), after “subsection (1B)”
, insert “or (1C)”
.
(2)
For a person who is a partner of a limited partnership registered under the Limited Partnerships Act 2008, subsection (1) applies for income years commencing on or after 1 April 2008. However, subsection (1) does not apply to a person in relation to a tax position taken by the person—
(a)
in the period that starts on 1 April 2008 and ends on 26 August 2024; and
(b)
that is inconsistent with the amendment made to section RF 3 by subsection (1).
126 Section RF 12 amended (Interest paid by approved issuers or transitional residents)
(1)
In section RF 12(1)(a)(ii), replace “a trust (a security trust) established for the main purpose of protecting and enforcing beneficiaries’ rights under the registered security”
with “a security trust”
.
(2)
In section RF 12, list of defined terms, insert “security trust”
.
127 Section RL 1 amended (Residential land withholding tax)
In section RL 1(2)(a), replace “CB 6A(5)(a)”
with “CB 6A(5)(b)(i)”
.
128 Section RP 17B amended (Tax pooling accounts and their use)
(1)
Replace section RP 17B(2)(b) with:
(b)
terminal tax, other than terminal tax for a person to whom section RC 3(2)(e) or (f) (Who is required to pay provisional tax?) applies:
(2)
Subsection (1) applies for the 2026–27 and later income years.
129 New section RP 17C inserted (Extension of time for tax pooling for 2022–23 and 2023–24 income years)
After section RP 17B, insert:
RP 17C Extension of time for tax pooling for 2022–23 and 2023–24 income years
Extension of time for tax pooling
(1)
This section extends the time within which a person must make a request under section RP 17B(4)(a) and (b).
Criteria for extension of time
(2)
A person may ask a tax pooling intermediary to arrange the transfer of an amount to their tax account with the Commissioner on or before 1 October 2027 if the criteria in subsections (3) to (7) are met.
Obligation for 2022–23 or 2023–24 income years
(3)
The transfer satisfies an obligation for either or both of the 2022–23 and 2023–24 income years for 1 or more of the following:
(a)
provisional tax (other than under the AIM method) for a tax year:
(b)
terminal tax for a tax year:
(c)
interest under Part 7 of the Tax Administration Act 1994 on the provisional tax or terminal tax.
Contract entered into on or before 1 October 2026
(4)
The person enters into a contract with the tax pooling intermediary on or before 1 October 2026 to satisfy an obligation described in subsection (3).
Person meets certain requirements
(5)
On the date the contract is entered into, the person—
(a)
is not bankrupt or liquidated:
(b)
was not presumed to have been unable to pay their debts under section 287 of the Companies Act 1993 at some time in the previous 12 months:
(c)
has not committed an act of bankruptcy under the Insolvency Act 2006 at some time in the previous 12 months:
(d)
is not the subject of legal recovery proceedings for unpaid tax.
No outstanding returns or information
(6)
On the date the contract is entered into, the person has provided all the following that the person is required to provide:
(a)
returns of income under section 33 of the Tax Administration Act 1994:
(b)
returns under the Goods and Services Tax Act 1985:
(c)
employment income information under sections 23E to 23H and 23J of the Tax Administration Act 1994.
No outstanding amounts
(7)
On the date the contract is entered into, the person does not have any of the following amounts payable for which the due date for payment has already passed:
(a)
goods and services tax payable under section 23 of the Goods and Services Tax Act 1985:
(b)
an amount set out in section RA 5 (Tax obligations for employment-related taxes).
Discretion to waive criteria
(8)
The Commissioner may waive some or all of the criteria set out in subsections (5), (6), and (7) if the Commissioner has accepted a request for financial relief under section 177 of the Tax Administration Act 1994.
Defined in this Act: amount, ask, Commissioner, pay, provisional tax, tax account with the Commissioner, terminal tax
130 New cross-heading and section RZ 17 inserted
After section RZ 16, insert:
Interest rate on employment-related loans
RZ 17 Interest rate on employment-related loans: transitional provision
(1)
This section applies for the period commencing on the date the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026 comes into force and ending on the day before the date a rate of interest for employment-related loans determined by the Commissioner under section 90B of the Tax Administration Act 1994 first applies.
(2)
For the purposes of the definition of prescribed rate of interest in section YA 1 (Definitions), the prescribed rate of interest means the rate applying under the Income Tax (Fringe Benefit Tax, Interest on Loans) Regulations 1995 immediately before their revocation by the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026.
131 Section YA 1 amended (Definitions)
(1)
This section amends section YA 1.
(2)
Insert, in appropriate alphabetical order:
52–53 week Fiscal Year is defined in section HZ 13 (Transitional rule for application of global anti-base erosion model rules) for the purposes of that section
(3)
In the definition of attributing interest, replace “EX 43”
with “EX 43B”
.
(4)
Insert, in appropriate alphabetical order:
benefit in money is defined in section CE 1(2B) (Amounts derived in connection with employment) for the purposes of that section
(5)
In the definition of calculation method, replace “and the cost method”
with “the cost method, and the revenue account method”
.
(6)
In the definition of civil union partner,—
(a)
replace “section”
with “sections”
; and
(b)
after “earners)”
, insert “and YD 1B (Non-resident visitors)”
.
(7)
In the definition of company,—
(a)
after paragraph (a), insert:
(aba)
for the purposes of section YC 4 (Look-through rule for corporate shareholders), includes a partnership treated as a company under section YC 4(9):
(abab)
for the purposes of section YC 11 (No look-through rule for companies in certain cases), includes a partnership treated as a company under section YC 11(5):
(b)
in paragraph (ab)(ii),—
(i)
after “of section YB 14”
, insert “,”
:
(ii)
delete “(Look-through rule for corporate shareholders)”
:
(iii)
after “YC 4”
, insert “, or under section YC 4(9) for the purposes of section YC 4, or under section YC 11(5) for the purposes of section YC 11”
.
(8)
Replace the definition of contract activity or service with:
contract activity or service, for a non-resident contractor,—
(a)
means—
(i)
performing any work in New Zealand:
(ii)
rendering a service of any kind in New Zealand:
(iii)
providing the use of, or right to use, in New Zealand, any personal property or services of a person other than the non-resident contractor:
(b)
does not include—
(i)
the operation of aircraft or ships by a non-resident, except when they load or ship cargo or embark or transport passengers in New Zealand for delivery or disembarkation in New Zealand:
(ii)
the provision of software as a service, platform as a service, or infrastructure as a service, except to the extent to which the service involves personnel located in New Zealand other than personnel who satisfy the conditions in section RD 8(1)(b)(v) (Schedular payments)
(9)
Insert, in appropriate alphabetical order:
eligible infrastructure entity is defined in section FE 7C(7) (Exemption for eligible infrastructure) for the purposes of that section
(10)
Insert, in appropriate alphabetical order:
employee deferred shares means shares issued or transferred to an employee share scheme beneficiary under an employee share scheme by a company that, in accordance with section EA 4B(2) (Deferred tax for unlisted employee share schemes), an employer has chosen to designate as employee deferred shares
(11)
Insert, in appropriate alphabetical order:
excess electricity is defined in section CW 61B (Income from supply of excess electricity from dwelling) for the purposes of that section
(12)
Insert, in appropriate alphabetical order:
excluded RAM interest is defined in section EX 46B(8) (Limits on choice of revenue account method)
(13)
Insert, in appropriate alphabetical order:
extended RAM interest is defined in section EX 46B(7) (Limits on choice of revenue account method)
(14)
Insert, in appropriate alphabetical order:
extended RAM taxpayer is defined in section EX 46B(10) (Limits on choice of revenue account method)
(15)
In the definition of fixed establishment, after paragraph (c)(ii), insert:
(iii)
a fixed place of business of a person who is a non-resident visitor
(16)
Insert, in appropriate alphabetical order:
gift card means any form of pre-paid card that is redeemable for, or used to purchase, goods or services, but does not include a short-term charge facility as defined in section CX 25(3) (Benefits provided by charitable organisations)
(17)
Replace the definition of imputation credit with:
imputation credit means a credit referred to in section OA 5(2) (Credits)
(18)
Insert, in appropriate alphabetical order:
limited-recourse debt is defined in section FE 7C(11) (Exemption for eligible infrastructure) for the purposes of that section
(19)
Insert, in appropriate alphabetical order:
liquidity event date is defined in section EA 4B (Deferred tax for unlisted employee share schemes)
(20)
In the definition of market value interest,—
(a)
in paragraph (ab), after “thing of the limited partnership”
, insert “at the time”
; and
(b)
after paragraph (ab), insert:
(ac)
means, for a person and a partnership that is treated as a company under section YC 4(9) (Look-through rule for corporate shareholders) or YC 11(5) (No look-through rule for companies in certain cases) and a time, the partnership share the person has in a right, obligation, or other property, status, or thing of the partnership at the time:
(21)
Insert, in appropriate alphabetical order:
non-debt liabilities is defined in section FE 7C(12) (Exemption for eligible infrastructure) for the purposes of that section
(22)
Insert, in appropriate alphabetical order:
non-resident visitor is defined in section YD 1B (Non-resident visitors)
(23)
Insert, in appropriate alphabetical order:
originator transition date is defined in section HR 10B (What happens when persons stop being originators?)
(24)
In the definition of prescribed rate of interest, replace “declared by regulations made under section RA 21(3) (Regulations)”
with “determined by the Commissioner under section 90B of the Tax Administration Act 1994”
.
(25)
In the definition of public entertainer, after “of that section”
, insert “and sections CW 22B and CW 22C (which relate to amounts derived from and by non-resident visitors during visits)”
.
(26)
Insert, in appropriate alphabetical order:
publish, as a requirement for the Commissioner, has the meaning set out in section 14H of the Tax Administration Act 1994
(27)
Insert, in appropriate alphabetical order:
qualifying infrastructure asset is defined in section FE 7C(8) (Exemption for eligible infrastructure) for the purposes of that section
(28)
Insert, in appropriate alphabetical order:
qualifying infrastructure debt is defined in section FE 7C(9) (Exemption for eligible infrastructure) for the purposes of that section
(29)
Insert, in appropriate alphabetical order:
qualifying infrastructure group is defined in section FE 7C(13) (Exemption for eligible infrastructure) for the purposes of that section
(30)
Insert, in appropriate alphabetical order:
RAM interest is defined in section EX 46B(6) (Limits on choice of revenue account method)
(31)
Insert, in appropriate alphabetical order:
RAM loss balance, for a tax year, means the sum of all RAM net losses arising in an earlier tax year and carried forward under section EX 59B(2) (Ring-fencing RAM net losses) to the tax year to the extent the losses have not been used under section EX 59B(3)
(32)
Insert, in appropriate alphabetical order:
RAM net loss, for a person and for an income year in which the person has a FIF loss under section EX 56B(3)(b) (Revenue account method), means the part of the FIF loss for which the person is denied a deduction because of section DN 8B (Ring-fencing cap on deduction: revenue account method)
(33)
Insert, in appropriate alphabetical order:
RAM taxpayer is defined in section EX 46B(9) (Limits on choice of revenue account method)
(34)
Insert, in appropriate alphabetical order:
revenue account method means the method of calculating FIF income or loss in section EX 56B (Revenue account method)
(35)
In the definition of schedular income,—
(a)
repeal paragraph (e); and
(b)
in paragraph (l), replace “Treatment of certain support payments made for period of more than 1 year”
with “Treatment of certain support payments for period of more than 365 days”
.
(36)
Insert, in appropriate alphabetical order:
security trust,—
(a)
in section YB 16 (Exceptions for certain trusts and charitable organisations), means a trust established for the main purpose of protecting and enforcing beneficiaries’ rights under a financial arrangement:
(b)
in section RF 12 (Interest paid by approved issuers or transitional residents), means a trust established for the main purpose of protecting and enforcing beneficiaries’ rights under a registered security as described in section RF 12(1)(a)(i)
(37)
Insert, in appropriate alphabetical order:
side-by-side package guidance is defined in section HZ 13 (Transitional rule for application of global anti-base erosion model rules) for the purposes of that section
(38)
In the definition of special corporate entity, after paragraph (g), insert:
(gb)
New Zealand Institute for Advanced Technology:
(39)
In the definition of spouse, replace “and in”
with “section YD 1B (Non-resident visitors), and”
.
(40)
Insert, in appropriate alphabetical order:
third-party debt is defined in section FE 7C (Exemption for eligible infrastructure) for the purposes of that section
(41)
In the definition of trading stock,—
(a)
in paragraph (a), after “(b),”
, insert “(ca),”
:
(b)
before paragraph (c), insert:
(ca)
in section DI 2 (When this subpart applies and does not apply), means property that is trading stock under section EB 2, ignoring section EB 2(3)(a):
(42)
In the definition of trust rules, in paragraph (h), delete “59BA, 59BAB,”
.
(43)
In the definition of voting interest,—
(a)
in paragraph (bb), after “thing of that limited partnership”
, insert “at the time”
:
(b)
in paragraph (bc), after “thing of that limited partnership”
, insert “at the time”
:
(c)
after paragraph (bc), insert:
(bd)
means, for a person and a partnership that is treated as a company under section YC 4(9) or YC 11(5) (No look-through rule for companies in certain cases) and a time, the partnership share the person has in a right, obligation, or other property, status, or thing of that partnership at the time:
(44)
In the definition of water organisation, delete “for the purposes of that section and section CW 39 (Local authorities)”
.
(45)
Subsections (20)(a) and (43)(a) apply, for the purposes of—
(a)
provisions other than the land provisions, for the 2010–11 and later income years:
(b)
the land provisions other than section CB 11 (Disposal within 10 years of improvement: building business), for land acquired on or after 6 October 2009:
(c)
section CB 11, for land on which improvements are begun on or after 6 October 2009.
(46)
Subsections (9), (18), (21), (27), (28), (29), (40), and (42) apply for the 2026–27 and later income years.
132 Section YA 2 amended (Meaning of income tax varied)
(1)
Repeal section YA 2(1)(a).
(2)
In section YA 2(1)(c), replace “107A to 108B”
with “107A and 108”
.
(3)
Replace section YA 2(2) with:
(2)
The term income tax includes a tax that is prescribed in a tax recovery agreement made under Part 10A of the Tax Administration Act 1994 in section BH 1 (Double tax agreements).
(4)
Repeal section YA 2(3)(a).
133 Section YB 16 amended (Exceptions for certain trusts and charitable organisations)
(1)
Replace section YB 16(3) with:
Persons not associated because of role in security trust
(3)
A person (person A) who is party to a financial arrangement with another person (person B) is not associated with person B solely because, in relation to a security trust established or existing in connection with the financial arrangement, person A—
(a)
is a beneficiary:
(b)
is a settlor:
(c)
has a power to appoint or remove a trustee.
Persons not associated because of role in securitisation trust
(4)
A person who is party to a financial arrangement with the trustee of a securitisation trust is not associated with the trustee of the securitisation trust if the person,—
(a)
in the absence of this subsection, would be associated with the trustee of the securitisation trust solely because they—
(i)
are a settlor of the securitisation trust:
(ii)
have a power to appoint or remove the trustee of the securitisation trust; and
(b)
becomes a settlor or acquires such a power only as an incident of being a party to the financial arrangement.
(2)
In section YB 16, list of defined terms, insert “security trust”
.
134 Section YC 4 amended (Look-through rule for corporate shareholders)
(1)
After section YC 4(8), insert:
Partnership treated as company
(9)
For the purposes of this section, a partnership is treated as a company if the partnership has, or is treated as having, a voting interest in a company or, if a market value circumstance exists for the company, a market value interest in the company.
(2)
In section YC 4, list of defined terms, insert “market value circumstance”
and “partnership”
.
135 Section YC 11 amended (No look-through rule for companies in certain cases)
(1)
After section YC 11(4), insert:
Partnership treated as company
(5)
For the purposes of this section, a partnership is treated as a company if the partnership has, or is treated as having, a voting interest in a company or, if a market value circumstance exists for the company, a market value interest in the company.
(2)
In section YC 11, list of defined terms, insert “market value circumstance”
and “partnership”
.
136 Section YD 1 amended (Residence of natural persons)
(1)
After section YD 1(12), insert:
Treatment of non-resident visitors
(13)
Despite subsection (3), if a person is a non-resident visitor, they are treated as a non-resident for the period they are a non-resident visitor unless section YD 1B(3)(a) applies.
Treatment on ending non-resident visitor status
(14)
Despite subsection (4), if a person who is a non-resident visitor stops being a non-resident visitor under section YD 1B(4) or (5) and meets the requirement in subsection (3), the person is only treated as a resident from the first day the person stops being a non-resident visitor.
(2)
In section YD 1, list of defined terms, insert “non-resident”
and “non-resident visitor”
.
137 New section YD 1B inserted (Non-resident visitors)
(1)
After section YD 1, insert:
YD 1B Non-resident visitors
What this section does
(1)
This section contains the rules for determining when a person is a non-resident visitor and when they cease to be a non-resident visitor.
Meaning of non-resident visitor
(2)
A person who visits New Zealand is a non-resident visitor if—
(a)
they are a natural person; and
(b)
their visit is for 275 or fewer days, counting the days of arrival and departure as a whole day each; and
(c)
they are personally present in New Zealand for 275 or fewer days in total in an 18-month period that includes the period of the visit; and
(d)
immediately before the first day they are personally present, they were not resident in New Zealand and were not a transitional resident; and
(e)
they are not undertaking work that—
(i)
is for a New Zealand resident or a New Zealand branch of a non-resident; or
(ii)
is offering goods or services in New Zealand for income from persons or businesses in New Zealand; or
(iii)
requires the person to be physically present in New Zealand; and
(f)
they, or their spouse, civil union partner, or de facto partner, are not receiving an entitlement under the family scheme; and
(g)
they are lawfully present in New Zealand under the Immigration Act 2009; and
(h)
they are resident in a country or territory outside New Zealand or liable to tax in a country or territory outside New Zealand on the basis of citizenship.
Ending non-resident visitor status: unlawful presence
(3)
If a person who is a non-resident visitor ceases to meet the requirement in subsection (2)(g),—
(a)
for the purposes of determining the person’s liabilities and obligations under this Act, the person stops being a non-resident visitor and is treated as if they were never a non-resident visitor:
(b)
for the purposes of determining the liabilities and obligations under this Act of any other person, the person stops being a non-resident visitor on the date the cessation occurs.
Ending non-resident visitor status: change of residency or citizenship status
(4)
If a person who is a non-resident visitor ceases to meet the requirement in subsection (2)(h), the person stops being a non-resident visitor on the date the event that causes the cessation of residency or liability to tax occurs, regardless of whether the laws of that foreign country or territory treat the person’s cessation of residency or liability to tax as having occurred on an earlier date.
Ending non-resident visitor status: other requirements
(5)
If a person who is a non-resident visitor ceases to meet 1 or more of the requirements in subsection (2)(a) to (f), the person stops being a non-resident visitor on the date the cessation occurs.
Defined in this Act: business, civil union partner, de facto partner, family scheme, income, natural person, New Zealand, New Zealand resident, non-resident, non-resident visitor, resident in New Zealand, spouse, tax, transitional resident
(2)
Subsection (1) applies to a person who commences a visit to New Zealand on or after 1 April 2026.
138 Section YD 2 amended (Residence of companies)
(1)
After section YD 2(1B), insert:
Treatment of non-resident visitors
(1C)
For the purposes of subsection (1)(b), (c), and (d) and section YD 3(4)(b), (c), and (d), and for a foreign company, the activities in New Zealand of a non-resident visitor are disregarded.
(2)
In section YD 2, list of defined terms, insert “New Zealand”
and “non-resident visitor”
.
139 Section YD 3 amended (Country of residence of foreign companies)
In section YD 3(4), replace “The company”
with “Subject to section YD 2(1C), the company”
.
140 Section YD 4 amended (Classes of income treated as having New Zealand source)
(1)
After section YD 4(17C)(b), insert:
(c)
the income arises because of the activities in New Zealand of a non-resident visitor.
(2)
After section YD 4(17D)(c), insert:
(d)
income derived by the non-resident because of the activities in New Zealand of a non-resident visitor.
(3)
In section YD 4, list of defined terms, insert “non-resident visitor”
.
141 Section YD 4B amended (Meaning of permanent establishment)
(1)
After section YD 4B(4), insert:
Exception
(5)
For the purposes of subsections (2) to (4) and determining if an enterprise has a permanent establishment in New Zealand, the activities in New Zealand of a non-resident visitor are disregarded.
(2)
In section YD 4B, list of defined terms, insert “non-resident visitor”
.
142 Schedule 5 amended (Fringe benefit values for motor vehicles)
(1)
This section amends schedule 5.
(2)
In the heading, before “GB 31”
, insert “DI 5”
.
(3)
After clause 1(b), insert:
(c)
if expenditure on the vehicle has been allowed as a deduction for a new investment asset under section DI 5, subject to clause 10, the basis of the tax value of the vehicle to the person: for a quarter, 10.35% of the tax value, and for a tax year or income year, 41.4% of the tax value.
(4)
After clause 10(c), insert:
(cb)
the reference to 10.35% in clause 1 is treated as if it were a reference to a percentage calculated using the formula—
10.35 + (10.35 x rate of GST applying on last day of relevant quarter):
(5)
After clause 10(e), insert:
(f)
the reference to 41.4% in clause 1 is treated as if it were a reference to a percentage calculated using the formula—
41.4 + (41.4 x rate of GST applying on last day of relevant quarter).
(6)
Replace clause 13 with:
13
The minimum tax value of a motor vehicle to which this schedule applies is—
(a)
$8,333; or
(b)
$7,317 if expenditure on the vehicle has been allowed as a deduction for a new investment asset under section DI 5.
143 Schedule 28 amended (Requirements for complying fund rules)
(1)
In schedule 28, clause 7, replace “3%”
with “3.5%”
and replace “2006).”
with “2006), unless the employee has directed the trustee or agreed as a term of membership that the rate will be 3%.”
(2)
In schedule 28, clause 7, replace “3.5%”
with “4%”
.
144 Schedule 32 amended (Recipients of charitable or other public benefit gifts)
(1)
This section amends schedule 32.
(2)
Replace “International Christian Aid (ICA)”
with “International Christian Aid Relief Enterprises”
.
(3)
Replace “The New Zealand Society for the Intellectually Handicapped (Incorporated)”
with “IHC New Zealand Incorporated”
.
(4)
Replace “Hope Foundation Development Trust”
with “Building for Education”
.
(5)
Replace “Hope International Charitable Trust”
with “HOPENZ Charitable Trust”
.
(6)
Replace “Te Tuao Tawahi: Volunteer Service Abroad Incorporated”
with “Volunteer Service Abroad: Te Tūao Tāwāhi Incorporated”
.
(7)
Delete “New Zealand for UNHCR (United Nations High Commissioner for Refugees)”
.
(8)
Insert, in appropriate alphabetical order, “Aotearoa New Zealand for UNHCR”
.
(9)
Insert, in appropriate alphabetical order, “Engineers Without Borders New Zealand”
.
(10)
Insert, in appropriate alphabetical order,—
(a)
“Days for Girls NZ”
; and
(b)
“EduTech Nepal Foundation”
; and
(c)
“Revive Afghanistan NZ”
; and
(d)
“UN Women Aotearoa New Zealand”
.
(11)
Replace “Revive Afghanistan NZ”
with “Revive All NZ”
.
(12)
Replace “EduTech Nepal Foundation”
with “EduTech Foundation”
.
(13)
Delete—
(a)
“Four Sherpa Trust”
; and
(b)
“Fund for Timor”
; and
(c)
“Greater Mekong Subregion Tertiary Education Consortium Trust”
; and
(d)
“New Zealand Disaster Assistance Response Team Trust”
; and
(e)
“NPH New Zealand Charitable Trust”
; and
(f)
“NZ-Iraqi Relief Charitable Trust”
; and
(g)
“Register of Engineers for Disaster Relief New Zealand”
; and
(h)
“Sir Ray Avery Foundation”
; and
(i)
“Solomon Outreach Society”
; and
(j)
“Tender Trust”
; and
(k)
“Toraja Rural Development Charitable Trust”
; and
(l)
“Valehead Community Health Centre Trust”
.
(14)
Delete—
(a)
“Engineers Without Borders New Zealand Incorporated”
; and
(b)
“UN Women Aotearoa New Zealand Incorporated”
.
Section 144(4): editorial change made by the PCO, on 16 June 2026, under sections 86(1) and 87(l)(i) of the Legislation Act 2019 (2019 No 58).
145 Schedule 35 amended (Public purpose Crown-controlled companies)
(1)
This section amends schedule 35.
(2)
Delete “Crown Infrastructure Partners Limited”
.
(3)
Delete “Rau Paenga Limited”
.
(4)
Insert, in appropriate alphabetical order, “National Infrastructure Funding and Financing Limited”
.
(5)
Insert, in appropriate alphabetical order, “Crown Infrastructure Delivery Limited”
.
146 Consequential amendments to Income Tax Act 2007 related to repeal of sections in subpart RM
The Income Tax Act 2007 is amended as set out in schedule 1, part A.
Part 3 Amendments to Goods and Services Tax Act 1985
147 Amendments to Goods and Services Tax Act 1985
This Part amends the Goods and Services Tax Act 1985.
148 Section 2 amended (Interpretation)
(1)
This section amends section 2(1).
(2)
Insert, in appropriate alphabetical order:
flow-through joint venture means a joint venture for which an election has been made under section 57B(2) and does not include a partnership
(3)
Insert, in appropriate alphabetical order:
joint venture property means assets jointly owned and rights jointly held by members of a joint venture for the purposes of the joint venture
(4)
In the definition of land, in the words before the paragraphs, after “land rules”
, insert “and in section 11(1)(md)”
.
(5)
Insert, in appropriate alphabetical order:
non-integral deductions means, for goods (the main goods), deductions for other goods or services that—
(a)
did not make a substantial improvement to the main goods; and
(b)
did not become an integral part of the main goods without which the main goods would be incomplete or unable to function
(6)
Insert, in appropriate alphabetical order:
non-resident visitor has the same meaning as in section YA 1 of the Income Tax Act 2007
(7)
Insert, in appropriate alphabetical order:
ordinary joint venture means a joint venture that is not a partnership or a flow-through joint venture
(8)
Replace the definition of person with:
person—
(a)
includes a company, an unincorporated body of persons, a public authority, and a local authority; and
(b)
does not include a flow-through joint venture
(9)
Insert, in appropriate alphabetical order:
publish, as a requirement for the Commissioner, has the meaning set out in section 14H of the Tax Administration Act 1994
(10)
Replace the definition of unincorporated body with:
unincorporated body—
(a)
means an unincorporated body of persons; and
(b)
includes a partnership, the trustees of a trust, and an ordinary joint venture; and
(c)
does not include a flow-through joint venture
(11)
Subsection (5) applies to supplies made on or after 1 April 2011. However, subsection (5) does not apply to supplies for which an assessment has been made before 30 August 2022.
149 Section 2A amended (Meaning of associated persons)
(1)
Replace section 2A(1)(db) with:
(db)
an ordinary joint venture and a member of the ordinary joint venture:
(2)
After section 2A(1)(db), insert:
(dc)
2 members of an ordinary joint venture or of a flow-through joint venture when they transact in their capacity as members of the joint venture:
(3)
In section 2A(8), replace “subsection (1)(c)”
with “subsection (1)(c) or (db)”
.
150 Section 3 amended (Meaning of term financial services)
In section 3(2), in the definition of participatory security, replace “or a cheque”
with “a cheque, or an interest in a flow-through joint venture”
.
151 Section 5 amended (Meaning of term supply)
(1)
Replace section 5(16)(a)(i) with:
(i)
claimed a deduction under section 20(3) for the goods or services, excluding non-integral deductions; or
(2)
Replace section 5(16)(a)(ii) and (iii) with:
(ii)
acquired goods or services that were zero-rated under section 11(1)(m), (mb), (mc), or (md); and
(3)
After section 5(23B), insert:
(23C)
Subsection (23D) applies if—
(a)
section 11(1)(mc) is treated as applying to a taxable supply of goods and services in a return provided by the supplier; and
(b)
after the date on which the supply is made, the recipient or the Commissioner finds that section 11(1)(mc) does not apply.
(23D)
The recipient of the supply of the goods and services referred to in subsection (23C) is treated as if they were a supplier making a taxable supply of the goods and services on the date on which the error referred to in subsection (23C)(b) is found.
(23E)
Subsection (23F) applies if—
(a)
section 11(1)(md) is treated as applying to a taxable supply of goods and services in a return provided by the supplier; and
(b)
after the date on which the supply is made, the supplier or the Commissioner finds that section 11(1)(md) does not apply; and
(c)
the recipient of the goods and services did not provide the supplier with correct or sufficient information under section 78FB to enable the supplier to determine whether the supply should be zero-rated.
(23F)
The recipient of the supply of the goods and services referred to in subsection (23E) is treated as if they were a supplier making a taxable supply of the goods and services on the date on which the error referred to in subsection (23E)(b) is found.
(4)
After section 5(29), insert:
(30)
Any supply of goods and services made jointly by members of a flow-through joint venture is treated as being divided into separate supplies made by each of the members.
152 Section 6 amended (Meaning of term taxable activity)
(1)
Replace section 6(3)(e)(i) with:
(i)
the person has not previously claimed a deduction under section 20(3) for the goods before the goods are sold, excluding non-integral deductions; and
(2)
In section 6(3)(e)(iv), replace “or (mb)”
with “, (mb), (mc), or (md)”
.
(3)
After section 6(5), insert:
(6)
For the purposes of subsection (3)(b), a person is not engaged, occupied, or employed under a contract of service if the person is—
(a)
a specified contractor, as defined in section 6 of the Employment Relations Act 2000; or
(b)
not an employee under that section because their employment status is determined as other than an employee under another Act.
(4)
Subsection (1) applies to supplies made on or after 1 April 2011. However, subsection (1) does not apply to supplies for which an assessment has been made before 30 August 2022.
153 Section 10 amended (Value of supply of goods and services)
(1)
In section 10(7A), replace “or section 5(16C)(b) applies”
with “or if section 5(16C)(b) or 57(2)(db) apply”
.
(2)
In section 10(7B), replace “5(23B),”
with “5(23B), (23D), or (23F),”
.
154 Section 11 amended (Zero-rating of goods)
(1)
In section 11(1)(k), replace “section 11A(1)(h) or (i)”
with “section 11A(1)(h), (i), or (iba)”
.
(2)
After section 11(1)(mb), insert:
(mc)
the supply of goods and services by an unincorporated body, if the supply is—
(i)
to a registered person who acquires the goods and services with the intention of using them for making taxable supplies; and
(ii)
made under section 57(2)(db); or
(md)
the supply of an interest in joint venture property by a member of a flow-through joint venture to a new or existing member if, at the time of supply,—
(i)
both the supplier and the recipient are registered persons; and
(ii)
the recipient acquires the interest with the intention of using it for making taxable supplies; and
(iii)
the supply does not consist wholly or partly of land; or
(3)
Subsection (2) applies to supplies made on or after 1 April 2026.
155 Section 11A amended (Zero-rating of services)
In section 11A(1)(k)(ii), replace “or (i)”
with “, (i), or (iba)”
.
156 Section 12 amended (Imposition of goods and services tax on imports)
In section 12(4)(e), replace “75”
with “71”
.
157 Section 15D amended (When changes in basis of taxable periods take effect)
(1)
After section 15D(2), insert:
(2BA)
Despite subsection (2), the change in taxable period under subsection (1)(a) or (b) takes effect on the date of the person’s registration in the case of a registered person who applies to change the basis on which their taxable period is set—
(a)
if the person registered under this Act in November, on or before 20 January following that registration; or
(b)
in all other cases, within 35 days after the end of the month in which the person registered under this Act.
(2)
In section 15D(3), replace “subsection (2)”
with “subsections (2) and (2BA)”
.
158 Section 19E amended (Definitions of types of record)
In section 19E(2)(a)(ii), after “the recipient”
, insert “, if the recipient is a registered person and informs the supplier of that status”
.
159 Section 19K amended (Taxable supply information: supplies by registered person)
After section 19K(8), insert:
(8B)
A recipient who is a registered person and receives a taxable supply when the consideration in money or money’s worth for the supply exceeds $1,000 must—
(a)
notify the supplier that they are a registered person; and
(b)
provide the supplier with their recipient details.
160 Section 19N amended (Supply correction information)
After section 19N(7)(c), insert:
(d)
if the supply was not zero-rated, because section 11(1)(md) was incorrectly applied to the supply, the date that is 7 years from the date the supply was made.
161 Section 20 amended (Calculation of tax payable)
(1)
After section 20(3D), insert:
(3DB)
If a flow-through joint venture makes both taxable and exempt supplies, the method of apportionment applied by each member when claiming an input tax deduction on an acquisition of goods or services must be—
(a)
the same method for all members; and
(b)
agreed in writing between the members; and
(c)
fair and reasonable.
(2)
In section 20(3J), replace “or (mb)”
with “, (mb), (mc), or (md)”
.
(3)
Replace section 20(4B) with:
(4B)
A person who is treated under section 5(23B), (23D), or (23F) as a supplier of goods or services under section 11(1)(mb), (mc), or (md) is denied a deduction under subsection (3) in relation to the supply. However, this subsection does not apply to a person who is required to account for tax under section 5(23B), (23D), or (23F) who is either a registered person or later becomes a registered person and uses the relevant goods or services for making taxable supplies.
162 Section 20F amended (Election that sections 11A(1)(q) and (r) and 20C apply)
Replace section 20F, other than the heading, with:
A person may choose to apply the rules in sections 11A(1)(q) and (r) and 20C in relation to certain supplies of financial services. The person makes the election by doing either or both of the following:
(a)
taking a tax position in a return for the taxable period:
(b)
notifying the Commissioner before the end of the taxable period in which they first choose to apply the rules.
163 Section 21B amended (Adjustments when person or partnership becomes registered after acquiring goods and services)
(1)
In section 21B(1)(b), replace “the goods”
with “the goods or services”
.
(2)
Replace section 21B(5) with:
(5)
For the purposes of determining the amount of input tax under section 3A for a supply of secondhand goods, the person is treated as if they had been a registered person at the time the goods were acquired, and the tax fraction applying is the tax fraction that would have applied at that time.
164 Section 21F amended (Treatment on disposal)
In section 21F(6)(a), replace “or (mb)”
with “, (mb), (mc), or (md)”
.
165 Section 51 amended (Persons making supplies in course of taxable activity to be registered)
(1)
After section 51(1C), insert:
(1D)
For the purposes of determining the liability of a person who is a non-resident visitor to be registered under subsection (1), the value of a supply of services to which section 11A(1)(k) applies is not included in the total value of supplies made in New Zealand by the person.
(2)
After section 51(5B), insert:
(5C)
If members of a flow-through joint venture are jointly carrying on a taxable activity, each member of the joint venture is liable to be registered with effect on the date that the joint venture would have been liable to be registered under subsection (1) if it had been an ordinary joint venture.
166 Section 51B amended (Persons treated as registered)
(1)
In section 51B(4), delete “either”
.
(2)
In section 51B(4), (5), and (6), replace “or (23B)”
with “, (23B), (23D), or (23F)”
in each place.
167 Section 55B amended (Supplier group and issuing member)
(1)
In section 55B(1), replace “each supply”
with “agreed taxable supplies”
.
(2)
In section 55B(2)(a)(i), replace “each supply”
with “agreed taxable supplies”
.
(3)
In section 55B(2)(a)(ii), replace “by the member”
with “when the members of the supplier group have agreed that the information will be provided by the issuing member”
.
(4)
Subsections (1), (2), and (3) apply for taxable periods starting on or after 1 April 2023.
168 Section 57 amended (Unincorporated bodies)
After section 57(2)(d), insert:
(db)
any goods and services forming part of the assets of a taxable activity carried on by the body are treated, in the event of cancellation of the body’s registration, as being supplied by the body to its members in the course of that taxable activity immediately before it ceases to be registered, unless the taxable activity is carried on by another person that is treated as a registered person under section 58; and
169 New section 57B inserted (Flow-through joint ventures)
After section 57, insert:
57B Flow-through joint ventures
(1)
This section applies to ordinary joint ventures that become flow-through joint ventures.
(2)
An ordinary joint venture that has not previously been registered may choose to become a flow-through joint venture if—
(a)
each member agrees in writing to become a flow-through joint venture; and
(b)
a nominated member of the joint venture notifies the Commissioner in the prescribed form within 21 days of the date of the agreement.
(3)
An election under subsection (2) takes effect on the date of the agreement and cannot be revoked.
(4)
Despite subsection (3), if the criteria in subsection (2) other than that specified in paragraph (b) are satisfied, the Commissioner may treat the joint venture as a flow-through joint venture with effect on a date the Commissioner decides.
(5)
Goods or services that the ordinary joint venture acquired and that are being used by a member of the flow-through joint venture for making taxable supplies are treated as if the member acquired the goods or services for the purposes of sections 21 to 21H.
(6)
A member of a flow-through joint venture must either—
(a)
keep records that are sufficient for the Commissioner to ascertain the proportions in which each member makes and receives joint venture supplies and acquisitions; or
(b)
agree in writing with the other members the proportions in which each member makes and receives joint venture supplies and acquisitions.
(7)
Within 21 days of any change in membership, a nominated member of a flow-through joint venture must notify the Commissioner of—
(a)
the name of any person who is no longer a member:
(b)
the name and tax file number of any person who is a new member:
(c)
the date that the change occurred.
(8)
Special rules apply to a flow-through joint venture. These are set out as follows:
(a)
section 5(30), for the flow-through treatment of supplies made by the joint venture:
(b)
sections 5(23F), 11(1)(md), 19N(7)(d), 75(3BB), and 78FB, which apply to zero-rated supplies between flow-through joint venture members:
(c)
section 20(3DB), if the joint venture makes both taxable and exempt supplies:
(d)
section 51(5C), for the registration requirements for members of the flow-through joint venture:
(e)
section 60(2BA), which treats a member of a flow-through joint venture as an agent when supplies are made to the joint venture.
(9)
Sections 92 to 94 set out transitional provisions as follows:
(a)
section 92 (Unincorporated bodies electing to become flow-through joint ventures):
(b)
section 93 (Joint ventures applying flow-through treatment before 1 April 2026):
(c)
section 94 (Transitional rule to become flow-through joint venture before 1 April 2027).
170 Section 58 amended (Personal representative, liquidator, receiver, etc)
In section 58(1C), replace “if the incapacitated person is entitled to, and has not previously deducted, the amount”
with “if, at the time the deduction is claimed, the incapacitated person would have been entitled to a deduction for the amount had they not been incapacitated, and the incapacitated person has not previously deducted the amount”
.
171 Section 60 amended (Agents and auctioneers)
After section 60(2), insert:
(2BA)
When a registered person makes a taxable supply of goods and services to a member of a flow-through joint venture, if the member acquires the supply for the benefit of all members of the joint venture then, for the purposes of subsection (2), the member is treated as agent for the other members.
172 Section 75 amended (Keeping of records)
After section 75(3B), insert:
(3BB)
For the purposes of section 11(1)(md), the supplier must maintain sufficient records to enable the following particulars in relation to the supply to be ascertained at the time of supply:
(a)
the name and contact details of the recipient; and
(b)
the registration number of the recipient; and
(c)
a description of the goods and services; and
(d)
the consideration for the supply.
173 New section 78FB inserted (Liability for supplies between members of flow-through joint ventures)
After section 78F, insert:
78FB Liability for supplies between members of flow-through joint ventures
(1)
This section applies to a supply to which section 11(1)(md) applies.
(2)
At or before the time of supply, the recipient is required to notify the supplier whether, at the time of supply,—
(a)
they are, or expect to be, a registered person; and
(b)
they are acquiring the supply of the interest in joint venture property with the intention of using it for making taxable supplies.
(3)
For the purposes of subsection (2)(a), a recipient who is a registered person, or who expects to be a registered person, must provide their registration number to the supplier at or before the time of supply.
(4)
The supplier may rely on the information provided as required by subsection (2) in determining the tax treatment of the supply.
(5)
For the purposes of section 5(2), the notice referred to in subsection (2) must be provided to the second person referred to in section 5(2).
174 Section 90 amended (Transitional regulation-making power: legislative charges)
In section 90(1), replace “the schedule”
with “schedule 1”
.
175 Section 91 amended (Certain private goods removed from tax base before 1 April 2025)
(1)
Replace section 91(4) with:
(4)
If, after returning output tax under subsection (3), the person has claimed no deduction under section 20(3) for the goods, excluding non-integral deductions, then any future disposal of the goods is not a taxable supply.
(2)
Replace section 91(4) with:
(4)
Any future disposal of the goods is not a taxable supply if, after returning output tax under subsection (3), the person has not—
(a)
claimed a deduction under section 20(3) for the goods, excluding non-integral deductions; and
(b)
used the goods for the principal purpose of making taxable supplies.
176 New sections 92 to 94 inserted
After section 91, insert:
92 Unincorporated bodies electing to become flow-through joint ventures
(1)
This section applies to an unincorporated body that is—
(a)
a joint venture and not a partnership; and
(b)
registered before 1 April 2026.
(2)
Despite section 57B(2) applying to an ordinary joint venture, the unincorporated body may, before 1 April 2027, request the Commissioner to cancel its registration and make an election to become a flow-through joint venture under section 57B(2) if—
(a)
each member agrees in writing to become a flow-through joint venture; and
(b)
the joint venture notifies the Commissioner in the prescribed form.
(3)
If subsection (2) applies, each member is liable to be registered in accordance with section 51(5C). This subsection overrides the specific requirements of section 52(1) about the value of the person’s taxable supplies.
(4)
Despite section 57B(3), an election under section 57B(2) in accordance with subsection (2) takes effect on the date of cancellation and cannot be revoked.
93 Joint ventures applying flow-through treatment before 1 April 2026
(1)
Subsection (4) applies to a joint venture that is not a partnership if, before 1 April 2026, the following criteria are met:
(a)
the members of the joint venture have consistently adopted a tax position treating the supply and acquisition of goods and services by the joint venture as separate supplies and acquisitions made by the members; and
(b)
the joint venture is not registered; and
(c)
each member of the joint venture is registered if the joint venture would have been liable to have been registered under section 51(1).
(2)
In addition to the criteria set out in subsection (1), subsection (4) applies only if the joint venture chooses to become a flow-through joint venture under section 57B(2) before 1 April 2027. Such an election takes effect on 1 April 2026 and cannot be revoked.
(3)
If the joint venture does not notify the Commissioner as required by subsection (2) but otherwise fulfils the criteria in subsection (1), the Commissioner may treat the joint venture as a flow-through joint venture with effect on a date the Commissioner determines.
(4)
For taxable periods starting before 1 April 2026, the joint venture is not treated as a person under section 2(1), and section 57 does not apply to the joint venture.
94 Transitional rule to become flow-through joint venture before 1 April 2027
(1)
An ordinary joint venture that has not previously been registered may choose to become a flow-through joint venture under section 57B(2) if—
(a)
each member agrees in writing to become a flow-through joint venture; and
(b)
a nominated member of the joint venture notifies the Commissioner in the prescribed form before 1 April 2027.
(2)
An election made under section 57B(2) takes effect on 1 April 2026, or a later date notified by the joint venture, and cannot be revoked.
(3)
If the joint venture does not notify the Commissioner as required by subsection (1)(b), but otherwise fulfils the criteria in subsection (1), the Commissioner may treat the joint venture as a flow-through joint venture with effect on a date the Commissioner determines.
(4)
The time frames set out in section 57B(2)(b) and (3) do not apply for the purposes of this section.
177 Consequential amendments to Goods and Services Tax Act 1985 to clarify Commissioner’s requirement to publish
The Goods and Services Tax Act 1985 is amended as set out in schedule 2, part A.
Part 4 Amendments to Tax Administration Act 1994
178 Amendments to Tax Administration Act 1994
This Part amends the Tax Administration Act 1994.
179 Section 3 amended (Interpretation)
(1)
This section amends section 3(1).
(2)
In the definition of government agency, after paragraph (b), insert:
(c)
is defined in section 18HB for the purposes of that section
(3)
Repeal the definitions of nil value distribution, nil value settlement, non-cash distribution, and non-cash settlement.
(4)
Replace the definition of personal information with:
personal information—
(a)
is defined in schedule 7, part A, clause 6 for the purposes of that clause:
(b)
is defined in schedule 7, part C, subpart 2, clause 45(7) for the purposes of that clause
(5)
Insert, in appropriate alphabetical order:
publish, as a requirement for the Commissioner, has the meaning set out in section 14H
(6)
In the definition of tax, paragraph (a)(xii), delete “is”
.
(7)
Replace the definition of tax law with:
tax law—
(a)
means—
(i)
a provision of an Inland Revenue Act other than the Unclaimed Money Act 1971, or an Act that such an Inland Revenue Act replaces:
(ii)
an Order in Council or a regulation made under another tax law:
(iii)
a non-disputable decision; and
(b)
includes,—
(i)
in relation to an obligation to provide a tax return or a tax form, a provision of the Accident Rehabilitation and Compensation Insurance Act 1992, the Accident Insurance Act 1998, or the Accident Compensation Act 2001, or a regulation made under any of those Acts:
(ii)
when the Commissioner is acting as agent for the Accident Compensation Corporation, a provision of the Accident Compensation Act 2001 that treats a levy as if it were a tax
(8)
Insert, in appropriate alphabetical order:
updated information is defined in schedule 7, part A, clause 6 for the purposes of that clause
(9)
Subsection (3) applies for the 2026–27 and later income years.
180 Section 14 amended (Modes of communication: general provisions)
After section 14(4), insert:
(5)
Section 14H sets out the requirements to be satisfied for the Commissioner to publish information.
181 New cross-heading and section 14H inserted
After section 14G, insert:
Publishing
14H Publishing
(1)
This section applies for the purposes of this Act, the Income Tax Act 2007, and the Goods and Services Tax Act 1985, unless the context requires otherwise.
(2)
A requirement in these Acts for the Commissioner to publish means the Commissioner must make the information accessible and available to the public, including by providing the information on an internet site maintained by or on behalf of the Inland Revenue Department.
182 Section 17C amended (Commissioner’s powers in relation to documents)
In section 17C(1), delete “17GB,”
.
183 Section 17E amended (Information or documents treated as in persons’ knowledge, possession or control)
(1)
In section 17E(1), delete “17GB(1),”
.
(2)
In section 17E(2), delete “, 17GB(1),”
.
184 Section 17GB repealed (Commissioner may require information or production of documents for tax policy development)
Repeal section 17GB.
185 Section 17H amended (Court may make order for provision of information)
In section 17H(1), delete “or 17GB”
.
186 New section 18HB inserted (Regular disclosure to government agency)
After section 18H, insert:
18HB Regular disclosure to government agency
(1)
Despite section 18, the Commissioner may disclose sensitive revenue information on an ongoing basis to the chief executive of a government agency to assist the agency in carrying out 1 or more of the following functions:
(a)
determining entitlement to, or eligibility for, government assistance:
(b)
the detection, investigation, prosecution, or punishment of suspected or committed crimes punishable by terms of imprisonment of 2 years or more:
(c)
removing the financial benefit of crime.
(2)
A disclosure to the government agency must be in accordance with a written agreement entered into by—
(a)
the Minister of Revenue; and
(b)
the Minister responsible for the government agency.
(3)
Before entering a written agreement under this section, or varying any such agreement, the Ministers must—
(a)
be satisfied that—
(i)
the information is readily available to Inland Revenue; and
(ii)
the disclosure is reasonable and practicable; and
(iii)
the disclosure will not undermine the integrity of the tax system; and
(iv)
the disclosure will support the maintenance of voluntary compliance; and
(v)
reasonable safeguards exist to protect the privacy of individuals and the commercial confidentiality of information, including sufficient compliance and audit requirements for the use, disclosure, and storage of the information; and
(vi)
appropriate procedures for the disclosure and retention are included in the agreement; and
(b)
consult the Privacy Commissioner and consider any comments received.
(4)
A written agreement must specify—
(a)
the type or class of information to be disclosed; and
(b)
the purpose for which the information is disclosed; and
(c)
the function being carried out by the government agency for which the information is required; and
(d)
how the information will assist with the carrying out of that function; and
(e)
the form or manner in which the information is to be disclosed; and
(f)
the positions or designations of the persons in the government agency to whom the information may be disclosed; and
(g)
the safeguards for protecting personal or commercially sensitive information; and
(h)
the requirements for storage and disposal of the information; and
(i)
the circumstances, if any, in which the information may be disclosed by the agency to another agency, and how that disclosure may be made; and
(j)
the requirements for reviewing the agreement.
(5)
Information obtained by compulsion under section 17I or 17J cannot be disclosed under an agreement made under this section.
(6)
The Commissioner must publish on an internet site maintained by or on behalf of the Inland Revenue Department the following information in relation to each agreement made under this section:
(a)
the name of the agreement; and
(b)
the parties to the agreement; and
(c)
the purpose of the information disclosure; and
(d)
the classes of information to be disclosed; and
(e)
the intended use of the information by the government agency.
(7)
The Commissioner must publish, in the department’s annual report, information on the ongoing performance of the agreement.
(8)
After an agreement under this section has been entered into, the Privacy Commissioner may raise any concerns about the agreement or its operation directly with—
(a)
the Minister of Revenue:
(b)
the Minister responsible for the government agency that is a party to the agreement.
(9)
In this section, government agency means—
(a)
a department named in Part 1 of Schedule 2 of the Public Service Act 2020:
(b)
the New Zealand Police:
(c)
the Accident Compensation Corporation:
(d)
Kāinga Ora–Homes and Communities:
(e)
Health New Zealand:
(f)
New Zealand Transport Agency:
(g)
National Emergency Management Agency:
(h)
Ministry for Ethnic Communities:
(i)
Office of the Privacy Commissioner.
187 Section 20 amended (Privilege for confidential communications between legal practitioners and their clients)
(1)
In section 20(1), replace “17GB to 17I”
with “17H, 17I”
.
(2)
In section 20(4), replace “17GB to 17I”
with “17H, 17I”
.
188 Section 20B amended (No requirement to disclose tax advice document)
In section 20B(1), replace “17E and 17GB to 17I”
with “17E, 17H, and 17I”
.
189 Section 20D amended (Claim that document is tax advice document)
In section 20D(4)(b), delete “or 17GB”
.
190 Section 20F amended (Person must disclose tax contextual information from tax advice document)
In section 20F(2)(b), delete “or 17GB”
.
191 Section 22C amended (Outline of subpart)
In section 22C(3)(b), replace “family assistance credits”
with “the family scheme”
.
192 Section 32M amended (Persons with approved issuer status)
(1)
In section 32M(1B), replace “is eligible to elect to pay approved issuer levy in relation to a security”
with “may apply to the Commissioner to have approved issuer status”
.
(2)
In section 32M(1B), replace “may apply to the Commissioner to have approved issuer status”
with “is eligible to elect to pay approved issuer levy in relation to a security”
.
(3)
In section 32M(2), replace “subsection (1)”
with “subsections (1) and (1B)”
.
193 Section 41A amended (Returns in relation to charitable or other public benefit gifts)
(1)
Repeal section 41A(3) and (4).
(2)
In section 41A(9), replace “subsections (2) and (3)”
with “section LD 1 of that Act”
.
(3)
Replace section 41A(13) with:
(13)
A refund under subsection (1) is recoverable as an excess tax credit under section 142D to the extent to which—
(a)
it is more than the correct amount of refund; or
(b)
the charitable or other public benefit gift to which the refund relates has subsequently been returned to the person who made the gift or an associated person.
(13B)
Despite subsection (6B), the time bar in section 108 does not apply to a refund to which subsection (13)(b) applies.
(4)
Subsection (3) applies to gifts returned on or after 26 August 2025.
194 Section 59BA repealed (Annual return for trusts)
(1)
Repeal section 59BA.
(2)
Subsection (1) applies for the 2026–27 and later income years.
195 Section 59BAB repealed (Commissioner may require trust information for period after 2013–14 income year)
(1)
Repeal section 59BAB.
(2)
Subsection (1) applies for the 2026–27 and later income years.
196 Section 68CB amended (Research and development tax credits: general approval)
(1)
Replace section 68CB(2) with:
(2)
The Commissioner may, in accordance with this section, approve a person’s research and development activities for 1 or more of the following:
(a)
the income year to which the application relates (the first income year):
(b)
up to 2 income years immediately following the first income year:
(c)
the income year immediately before the first income year, but only to the extent the activity is a supporting research and development activity described in section LY 5(1)(ab)(i) of the Income Tax Act 2007.
(2B)
The person must apply in accordance with subsection (3) on or before the last day of the third month after the end of the first income year. However, if the person has a balance date of 30 September, the application must be made on or before 15 January following the end of the first income year.
(2)
Replace section 68CB(7) and (7B) with:
(7)
The Commissioner may vary an approval, upon application, if—
(a)
the variation application meets the requirements in subsection (1)(a); and
(b)
the variation applied for meets the requirements of subsection (4); and
(c)
the application is made on or before the last day of the third month after the end of the relevant income year, except if the person has a balance date of 30 September, in which case the application must be made on or before 15 January following the end of the relevant income year.
(7B)
The Commissioner may vary an approval, upon application, to the extent to which the variation application relates solely to a supporting research and development activity for the income year immediately following the relevant income year, as provided by section LY 5(1)(ab)(ii) of the Income Tax Act 2007, if—
(a)
the variation application meets the requirements in subsection (1)(a); and
(b)
the variation applied for meets the requirements of subsection (4); and
(c)
the application is made on or before the last day of the 15th month after the end of the relevant income year, except if the person has a balance date of 30 September, in which case the application must be made on or before 15 January of the second income year following the relevant income year.
(7BB)
If the Commissioner accepts the variation under subsection (7) or (7B), the Commissioner must notify the person in accordance with subsection (5).
197 Section 75 amended (Notification of amalgamation to Commissioner)
Repeal section 75(b).
198 Section 79 amended (Other annual returns)
(1)
In section 79, delete “59BA,”
.
(2)
Subsection (1) applies for the 2026–27 and later income years.
199 Section 80 amended (Commissioner may require other returns to be made)
(1)
In section 80, delete “59BA,”
.
(2)
Subsection (1) applies for the 2026–27 and later income years.
200 New section 90B inserted (Determination on interest for employment-related loans)
After section 90A, insert:
90B Determination on interest for employment-related loans
(1)
The Commissioner may, from time to time, determine the rate of interest applying to employment-related loans.
(2)
When a determination is made under subsection (1), the rate of interest is to be set at the Reserve Bank of New Zealand floating first mortgage new customer housing interest rate.
(3)
When a determination is made under subsection (1), it applies to quarters starting from a date at least 1 month after the date the determination is made. A determination that reduces the rate of interest from the rate that applies at the time may apply for a quarter if made at least 1 month before that quarter ends.
(4)
A determination under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
| Legislation Act 2019 requirements for secondary legislation made under this section | ||||
| Publication | The maker must publish it in accordance with the Legislation (Publication) Regulations 2021 | LA19 s 74(1)(aa) | ||
| Presentation | The Minister must present it to the House of Representatives | LA19 s 114 | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
201 Cross-heading above section 91AAO amended
In the cross-heading above section 91AAO, delete “using fair dividend rate method”
.
202 New section 91AAP inserted (Determination on deemed rate of return)
After section 91AAO, insert:
91AAP Determination on deemed rate of return
(1)
For the purposes of section EX 55 of the Income Tax Act 2007 and for an income year, the Commissioner must determine the deemed rate of return used to calculate FIF income or loss under the deemed rate of return method.
(2)
The rate is to be set at the 5-year government stock rate for the income year plus 400 basis points.
(3)
For the purposes of subsection (2), the 5-year government stock rate is calculated as the average of the rates on 30 June, 30 September, 31 December, and 31 March in the income year. If a rate is not available on one of those dates, the rate on the first day a rate is available after that date is to be used in the calculation for that date.
(4)
A determination under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
| Legislation Act 2019 requirements for secondary legislation made under this section | ||||
| Publication | The maker must publish it in accordance with the Legislation (Publication) Regulations 2021 | LA19 s 74(1)(aa) | ||
| Presentation | The Minister must present it to the House of Representatives | LA19 s 114 | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
203 Section 91EL amended (Applying for short-process ruling)
After section 91EL(4)(d), insert:
(e)
if the person applying is a non-resident,—
(i)
the reference to annual gross income is treated as a reference to the person’s income, including any non-residents’ foreign-sourced income, and excluding any exempt or excluded income:
(ii)
the reference to the tax year is treated as a reference to the person’s most recently completed financial year.
204 Section 120C amended (Definitions)
In section 120C(1), in the definitions of Commissioner’s paying rate and taxpayer’s paying rate, replace “established and notified”
with “set”
and replace “an Order in Council”
with “a determination”
.
205 Section 120H replaced (Setting and varying interest rates)
Replace section 120H with:
120H Setting and varying interest rates
(1)
The Commissioner may, from time to time, determine the Commissioner’s paying rate and taxpayer’s paying rate.
(2)
When a determination is made under subsection (1), the Commissioner’s paying rate is to be set at the higher of—
(a)
the Reserve Bank of New Zealand 90-day bank bill rate less 100 basis points; and
(b)
0%.
(3)
When a determination is made under subsection (1), the taxpayer’s paying rate is to be set at the Reserve Bank of New Zealand floating first mortgage new customer housing rate plus 250 basis points.
(4)
When a determination is made under subsection (1), it applies from the next applicable instalment date for a person with a standard balance date set out in schedule 3, part A, column B, D, or F of the Income Tax Act 2007 that is at least 1 month after the date the determination is made.
(5)
A determination under this section is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
| Legislation Act 2019 requirements for secondary legislation made under this section | ||||
| Publication | The maker must publish it in accordance with the Legislation (Publication) Regulations 2021 | LA19 s 74(1)(aa) | ||
| Presentation | The Minister must present it to the House of Representatives | LA19 s 114 | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
206 Section 120OB amended (Variation to definitions for determining interest chargeable or payable to PAYE intermediaries)
In section 120OB(2), in the definitions of Commissioner’s paying rate and taxpayer’s paying rate, replace “established and notified”
with “set”
and replace “an Order in Council”
with “a determination”
.
207 New section 120PB inserted (Suspended recognition of income on deemed disposal of RAM interest)
After section 120PA, insert:
120PB Suspended recognition of income on deemed disposal of RAM interest
(1)
This section applies if—
(a)
a person has an amount of FIF income or loss under section EX 56B(3) of the Income Tax Act 2007 for an income year (the departure year) that arises because—
(i)
the person is treated as having disposed of an attributing interest in a FIF under section EX 56B(12) of that Act; and
(ii)
the person actually disposes of the interest within the period set out in section EX 56B(14) of that Act; and
(b)
the disposal referred to in paragraph (a)(ii) takes place in an income year (the disposal year) that is later than the departure year.
(2)
To the extent the actual disposal of the attributing interest alters the person’s liability to tax for the departure year (the extent of that altered liability being called the affected tax), no interest is payable to the Commissioner under this Part on the affected tax to the extent to which it is unpaid tax before the person’s terminal tax date for the disposal year.
208 Section 138E amended (Certain rights of challenge not conferred)
In section 138E(1)(e)(iii), replace “and RM 10”
with “RM 10, and RP 17B(13)”
.
209 New section 139BB inserted (Imposition of late payment penalty when suspended recognition of income for RAM interest)
After section 139BA, insert:
139BB Imposition of late payment penalty when suspended recognition of income for RAM interest
(1)
This section applies if—
(a)
a person has an amount of FIF income or loss under section EX 56B(3) of the Income Tax Act 2007 for an income year (the departure year) that arises because—
(i)
the person is treated as having disposed of an attributing interest in a FIF under section EX 56B(12) of that Act; and
(ii)
the person actually disposes of the interest within the period set out in section EX 56B(14) of that Act; and
(b)
the disposal referred to in paragraph (a)(ii) takes place in an income year (the disposal year) that is later than the departure year.
(2)
For the purposes of section 139B, to the extent the actual disposal of the attributing interest alters the person’s liability to tax for the departure year (the extent of that altered liability being called the affected tax), the default date for the affected tax is the person’s terminal tax date for the disposal year.
210 Section 226E amended (Application of changes to CRS standard)
Repeal section 226E(3).
211 Section 227H repealed (Transitional provision relating to annual return for trusts)
(1)
Repeal section 227H.
(2)
Subsection (1) applies for the 2026–27 and later income years.
212 New section 227I inserted (Transitional provision relating to interest rates)
After section 227H, insert:
227I Transitional provision relating to interest rates
(1)
This section applies for the period commencing on the date the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026 comes into force and ending on the day before the date the rates set by the Commissioner by a determination made under section 120H first apply.
(2)
For the purposes of sections 120C(1) and 120OB(2) and section RC 38(4) of the Income Tax Act 2007, the Commissioner’s paying rate and the taxpayer’s paying rate are the rates applying under the Taxation (Use of Money Interest Rates) Regulations 1998 immediately before their revocation by the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026.
| Legislation Act 2019 requirements for secondary legislation made under this section | ||||
| Publication | The maker must publish it in accordance with the Legislation (Publication) Regulations 2021 | LA19 s 74(1)(aa) | ||
| Presentation | The Minister must present it to the House of Representatives | LA19 s 114 | ||
| Disallowance | It may be disallowed by the House of Representatives | LA19 ss 115, 116 | ||
| This note is not part of the Act. | ||||
213 Schedule 7 amended (Disclosure rules)
(1)
In schedule 7, part A, replace clause 6, other than the heading, with:
(1)
Despite section 18, the Commissioner may disclose to an authorised person, as defined in section 98(1) of the Criminal Proceeds (Recovery) Act 2009, either or both of the following:
(a)
information about a person (person A) for the purpose specified in section 98(2)(b)(i) of that Act:
(b)
updated information for the purposes of ensuring the information disclosed under paragraph (a) remains accurate and up to date.
(2)
In this clause, updated information means information that—
(a)
relates to the information previously disclosed under subclause (1)(a); and
(b)
is readily available to the Commissioner; and
(c)
does not include information about any person not referred to in the disclosure under subclause (1)(a), unless—
(i)
that person is person A’s employer or financial services provider; and
(ii)
the Commissioner has previously disclosed information related to person A’s employment or financial services provider relationship; and
(iii)
the information is personal information.
(3)
In this clause, personal information means the following information about a person:
(a)
information that identifies the person:
(b)
their date of birth (if applicable):
(c)
their contact details.
(2)
In schedule 7, part C, clause 23B(6), repeal paragraph (e).
(3)
In schedule 7, part C, clause 33,—
(a)
in subclauses (3)(b) and (c), (4)(b), (c), and (d), (7), and (8)(a) and (c), delete “formally”
:
(b)
in subclause (3)(d), delete “formal”
:
(c)
after subclause (4), insert:
(4B)
When the Commissioner has communicated information under subclause (5) about a taxpayer and an amount of reportable unpaid tax to which subclause (3) or (4) applied (the original RUT) and the taxpayer subsequently has 1 or more additional amounts of reportable unpaid tax, subclause (5) also applies to those additional amounts of reportable unpaid tax.
(4C)
Subclause (4B) does not apply to an additional amount of reportable unpaid tax if the taxpayer has repaid in full the original RUT and any amounts of reportable unpaid tax to which subclause (4B) has previously been applied.
(d)
replace subclause (12)(a)(i) with:
(i)
that results from—
(A)
liability for or excess refunds of income tax, excluding refunds under section MF 5 or MF 6 of the Income Tax Act 2007, or is otherwise the overpayment or over-crediting of WFF tax credits; or
(B)
liability for or refunds of GST, amounts required to be deducted under the PAYE rules, amounts required to be deducted under the Student Loan Scheme Act 2011, amounts required to be deducted under the Child Support Act 1991, ESCT, RSCT, or any tax credits under Part L of the Income Tax Act 2007 excluding tax credits under section LB 4 of that Act; and
(e)
repeal subclause (12)(a)(ii).
(4)
In Schedule 7, part C, clause 38,—
(a)
in subclause (1), delete “of Callaghan Innovation,”
; and
(b)
replace subclause (2) with:
(2)
Section 18 does not prevent the Commissioner communicating to an officer, employee, or agent of the Ministry of Business, Innovation, and Employment information reasonably necessary for that person to perform their work in relation to the offer of research and development advice and incentives, including tax incentives, grants, loans, and any related measures aimed at incentivising research and development.
(c)
in subclause (3), replace “Callaghan Innovation”
with “the Ministry of Business, Innovation, and Employment”
.
(5)
Replace schedule 7, part C, clause 43(5)(a) with:
(a)
the last known contact details of the fines defaulter, including postal and email addresses, telephone number, and any other information that may be used to contact the fines defaulter; and
(6)
Repeal schedule 7, part C, clause 43(5)(b).
214 Schedule 8 amended (Reporting of income information by individuals and treatment of certain amounts)
(1)
In schedule 8, part B, clause 2(3)(d), replace “48,000”
with “53,500”
.
(2)
In schedule 8, part B, clause 2(4), replace paragraph (d) with:
(d)
0.330, if the individual’s annual gross income is more than $78,100 and not more than $180,000; or
(e)
0.390, if the individual’s annual gross income is more than $180,000.
(3)
Subsection (2) applies for the 2021–22 and later income years.
215 Consequential amendments to Tax Administration Act 1994 related to repeal of sections in subpart RM of Income Tax Act 2007
The Tax Administration Act 1994 is amended as set out in schedule 1, part B.
216 Consequential amendments to Tax Administration Act 1994 to clarify Commissioner’s requirement to publish
The Tax Administration Act 1994 is amended as set out in schedule 2, part B.
Part 5 Amendments to other enactments and revocations
Amendments to KiwiSaver Act 2006
217 Amendments to KiwiSaver Act 2006
Sections 218 to 220 amend the KiwiSaver Act 2006.
218 Section 4 amended (Interpretation)
(1)
In section 4(1), insert, in appropriate alphabetical order:
compulsory employer contribution means, for an employee, the amount of employer contribution calculated under section 101D
(2)
In section 4(1), in the definition of salary or wages, in the words before the paragraphs, replace “section RD 5(1)(a) to (c)”
with “section RD 5(1) and (1B)”
.
219 Section 101A amended (General)
In section 101A(1), replace “an amount of employer contribution (a compulsory employer contribution) calculated under section 101D”
with “a compulsory employer contribution”
.
220 Schedule 1 amended (KiwiSaver scheme rules)
(1)
In schedule 1, clause 4(2), replace “Subject to subclauses (4) to (6), a”
with “A”
.
(2)
In schedule 1, repeal clause 4(4) to (6).
Amendments to Unclaimed Money Act 1971
221 Amendments to Unclaimed Money Act 1971
Sections 222 to 224 amend the Unclaimed Money Act 1971.
222 Section 2 amended (Interpretation)
In section 2, insert, in appropriate alphabetical order:
tax file number has the same meaning as in section YA 1 of the Income Tax Act 2007
223 Section 5B amended (Obligations of holders)
(1)
After section 5B(2)(a), insert:
(aa)
the full name, date of birth, and tax file number of the owner:
(ab)
the address and contact details of the owner:
(2)
In section 5B(2)(b), delete “identity and”
.
(3)
After section 5B(2)(c), insert:
(d)
where applicable, the number of the account where the money is held, the date the account was opened, and the date of the owner’s last interaction with the account.
224 Section 11 amended (Commissioner may make payment to claimant)
In section 11(6)(a), replace “25”
with “20”
.
Amendments to Student Loan Scheme Act 2011
225 Amendments to Student Loan Scheme Act 2011
Sections 226 to 235 amend the Student Loan Scheme Act 2011.
226 New section 138A inserted (Loan interest cancelled if instalment arrangement complied with)
After section 138, insert:
138A Loan interest cancelled if instalment arrangement complied with
(1)
This section applies if—
(a)
a borrower is liable to pay loan interest under section 134; and
(b)
the borrower has entered into an instalment arrangement in accordance with section 154(1A) to repay an agreed amount; and
(c)
the borrower has met all their obligations under the instalment arrangement.
(2)
The Commissioner must cancel any loan interest that is calculated and accrued from the date the instalment arrangement is entered into until the date the agreed amount is repaid in full.
(3)
If loan interest is cancelled under subsection (2),—
(a)
the borrower’s loan balance is decreased by the amount of the cancelled loan interest if the loan interest has been added to the borrower’s loan balance under section 135(2); and
(b)
the borrower’s consolidated loan balance is decreased by the amount of the cancelled loan interest if the loan interest has been calculated and accrued under section 135(1) but not yet charged and added to the borrower’s loan balance.
227 Section 141 amended (Late payment interest reduced if instalment arrangement complied with)
Replace section 141(1)(b) with:
(b)
the borrower has entered into an instalment arrangement in relation to either—
(i)
the unpaid amount in accordance with section 154(1); or
(ii)
an agreed amount in accordance with section 154(1A) and section 141B does not apply because the borrower does not meet all their obligations under the instalment arrangement.
228 New section 141B inserted (Late payment interest cancelled if instalment arrangement complied with)
After section 141A, insert:
141B Late payment interest cancelled if instalment arrangement complied with
(1)
This section applies if—
(a)
a borrower is liable to pay late payment interest on an unpaid amount under section 139; and
(b)
the borrower has entered into an instalment arrangement in accordance with section 154(1A) to repay an agreed amount; and
(c)
the borrower has met all their obligations under the instalment arrangement.
(2)
The Commissioner must cancel any late payment interest that is charged from the date the instalment arrangement is entered into until the date the agreed amount is paid in full.
(3)
If late payment interest is cancelled,—
(a)
the borrower’s consolidated loan balance is decreased by the amount of the cancelled late payment interest; and
(b)
if the late payment interest has been added to the borrower’s unpaid amount under section 139, the borrower’s unpaid amount is decreased by the amount of the cancelled late payment interest.
229 Section 145 amended (Application for different types of relief for borrower)
(1)
Before section 145(1)(a), insert:
(aa)
relief from loan interest (see section 145A):
(2)
In section 145(2), replace “subsection (1)(a)”
with “subsection (1)(aa), (a), or (ab)”
.
230 New cross-heading and section 145A inserted
After section 145, insert:
Relief from loan interest
145A Commissioner may grant relief from loan interest
(1)
This section applies if a borrower—
(a)
has been charged with loan interest; and
(b)
has agreed with the Commissioner an amount required to repay their consolidated loan balance in full; and
(c)
applies under section 145(1)(aa) for relief from loan interest.
(2)
The Commissioner may, having regard to the circumstances of the case and if the Commissioner considers it equitable to do so, write off as much of the loan interest as the Commissioner considers equitable.
(3)
If loan interest is written off,—
(a)
the borrower’s loan balance is decreased by the amount of the written-off loan interest that is loan interest that has been added to the borrower’s loan balance under section 135(2); and
(b)
the borrower’s consolidated loan balance is decreased by the amount of the written-off loan interest that is loan interest that has been calculated and accrued under section 135(1) but not yet charged and added to the borrower’s loan balance.
(4)
The Commissioner may reverse a write-off if the amount was written off due to false or misleading information provided by the borrower.
231 Section 154 amended (Application for instalment arrangement)
After section 154(1), insert:
(1A)
If a borrower agrees with the Commissioner an amount required to repay their consolidated loan balance in full and applies for relief under section 145(1)(aa) or (a), the borrower may apply for entry into an instalment arrangement for that agreed amount. The application must be made in accordance with section 177(1)(b) of the Tax Administration Act 1994.
232 Section 184 amended (Challenge to decision concerning relief)
(1)
Before section 184(1)(a), insert:
(aa)
relief from loan interest under section 145A:
(2)
In section 184(2), after “section”
, insert “145A,”
.
233 Section 196 amended (Cancellation of interest if consolidated loan balance repaid early)
(1)
In section 196(1)(a), after “a borrower of the”
, insert “amount required to repay the”
.
(2)
In section 196(1)(b), replace “consolidated loan balance”
with “amount”
.
234 Schedule 1 amended (Conditions to borrower being treated as physically in New Zealand)
In schedule 1, clauses 7(2), 8(1)(a)(iii), and 9(a)(iii), replace “New Zealand Register of Quality Assured Qualifications”
with “New Zealand Qualifications and Credentials Framework”
.
235 Schedule 3 amended (Adjustments to net income for purposes of section 73, applying from 1 April 2014 for 2014–2015 and later tax years)
In schedule 3, clause 5, before paragraph (a), insert:
(aa)
an amount of income derived by a non-resident visitor from performing personal or professional services in New Zealand that is exempt income under section CW 22B of the Act:
(aab)
an amount of income derived by a non-resident that has a source in New Zealand under section YD 4(2) or (3) of the Act that is exempt income under section CW 22C of the Act:
Amendment to Child Support Act 1991
236 Amendment to Child Support Act 1991
(1)
This section amends the Child Support Act 1991.
(2)
In section 180(1), delete “written”
and “signed by the payee”
.
(3)
In section 180(2)(a), replace “beneficiary)”
with “beneficiary”
.
(4)
In section 180(3), delete “under subsection (1)”
.
(5)
After section 180(4), insert:
(5)
A notice of election under subsection (1) must be given using an approved form or in another way approved by the Commissioner.
Amendment to Accident Compensation Act 2001
237 Amendment to Accident Compensation Act 2001
(1)
This section amends the Accident Compensation Act 2001.
(2)
Replace section 245(2) with:
(2)
The Commissioner must, for an agreed collection fee, pay to the Corporation—
(a)
the actual amount of the levies, and any penalties in respect of those levies, collected by the Commissioner; or
(b)
if the actual amount cannot be accurately determined, an amount calculated in accordance with a formula agreed between the Commissioner and the Corporation.
(3)
Replace section 245(3) with:
(3)
The formula must provide for a close approximation of the amount of the levies and penalties collected based on previous years’ collection rates.
(3A)
The Commissioner must pay the amounts payable under this section to the Corporation on the dates agreed between the Commissioner and the Corporation. As far as reasonably practicable, these dates must align with the timing of payments received by the Commissioner from employers.
Amendment to Criminal Proceeds (Recovery) Act 2009
238 Amendment to Criminal Proceeds (Recovery) Act 2009
(1)
This section amends the Criminal Proceeds (Recovery) Act 2009.
(2)
Replace section 98(2)(b) with:
(b)
an authorised person referred to in paragraph (a) of the definition of authorised person in subsection (1) from disclosing information permitted to be disclosed by Schedule 7, Part A, clause 6 of the Tax Administration Act 1994 about a person whose name is supplied under paragraph (a) of this subsection to an authorised person referred to in paragraph (b) of that definition who requires the information for the purposes of—
(i)
establishing whether a prima facie case exists for taking civil recovery action under this Act; or
(ii)
ensuring the information disclosed under subparagraph (i) remains accurate and up to date.
Amendments to Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023
239 Amendments to Taxation (Annual Rates for 2022–23, Platform Economy, and Remedial Matters) Act 2023
240 Section 2 amended (Commencement)
Repeal section 2(40).
241 Section 119 amended (Schedule 32 amended (Recipients of charitable or other public benefit gifts))
Repeal section 119(3).
Amendments to Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025
242 Amendments to Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025
243 Section 2 amended (Commencement)
In section 2(36), delete “(58),”
.
244 Section 196 amended (New cross-heading and section 185U inserted)
In section 196, after new section 185U(4)(g), insert:
(h)
despite Section IV, paragraph F, subparagraph 1, the term “Partner Jurisdiction” means any jurisdiction, other than New Zealand, that has put in place equivalent legal requirements and that is included in a list published by New Zealand.
245 Section 205 amended (Section 3A amended (Meaning of input tax))
In section 205(3), replace “to goods acquired by a person on and after 30 March 2022”
with “to taxable periods starting on or after 30 March 2022”
.
Amendment to Taxation (Budget Measures) Act 2025
246 Amendment to Taxation (Budget Measures) Act 2025
(1)
This section amends the Taxation (Budget Measures) Act 2025.
(2)
In section 22(1), new section 101D(4)(a), replace “subpart 3B and”
with “subpart 3B or, if the employee is a member of a complying superannuation fund, the employee has a contribution rate of 3% in accordance with clause 7 of schedule 28 of the Income Tax Act 2007 and, in either case,”
.
Amendment to Māori Fisheries Amendment Act 2024
247 Amendment to Māori Fisheries Amendment Act 2024
(1)
This section amends the Māori Fisheries Amendment Act 2024.
(2)
In Schedule 2, new Part 2 inserted into Schedule 1AA, replace clause 7, other than the heading, with:
Ordinary shares transferred from Te Ohu Kai Moana Trustee Limited
(1)
Subclause (2) applies to ordinary shares that—
(a)
were income shares held by Te Ohu Kai Moana Trustee Limited; and
(b)
become ordinary shares under clause 2; and
(c)
a transferee receives under a transfer under clause 3(3)(a) or (b).
(2)
For the purposes of the continuity provisions defined in section YA 1 of the Income Tax Act 2007 (the continuity provisions), the transferee must be taken, on and after the date of the transfer, to have held the ordinary shares without interruption since the date Te Ohu Kai Moana Trustee Limited acquired the income shares.
Ordinary shares that were income shares
(3)
Subclause (4) applies to ordinary shares that—
(a)
were income shares held by a holder other than Te Ohu Kai Moana Trustee Limited; and
(b)
become ordinary shares under clause 2.
(4)
For the purposes of the continuity provisions, the holder must be taken, on and after the date the income shares become ordinary shares, to have held the ordinary shares without interruption since the date the holder acquired the income shares.
Cancelled voting shares
(5)
Subclause (6) applies to the voting shares held by Te Ohu Kai Moana Trustee Limited that are cancelled under clause 2(1).
(6)
For the purposes of the continuity provisions, the holders of the ordinary shares referred to in subclause (3) must be taken, on and after the date of cancellation of the voting shares, to have held the voting shares without interruption from the date Te Ohu Kai Moana Trustee Limited acquired the shares until the date of cancellation, with each being allocated a proportion of the voting shares the same as the proportion they hold of the total number of ordinary shares.
Amendments to Tax Administration (Financial Statements—Domestic Trusts) Order 2022
248 Amendments to Tax Administration (Financial Statements—Domestic Trusts) Order 2022
249 Clause 3 amended (Interpretation)
(1)
In clause 3(1), insert, in appropriate alphabetical order:
debt funding special purpose vehicle has the meaning given to it by section YA 1 of the Income Tax Act 2007
exempt ESS has the meaning given to it by section YA 1 of the Income Tax Act 2007
foreign trust has the meaning given to it by section YA 1 of the Income Tax Act 2007
lines trust has the meaning given to it by section YA 1 of the Income Tax Act 2007
Maori authority has the meaning given to it by section YA 1 of the Income Tax Act 2007
tax charity has the meaning given to it by section YA 1 of the Income Tax Act 2007
widely-held superannuation fund has the meaning given to it by section YA 1 of the Income Tax Act 2007.
(2)
Subsection (1) applies for the 2026–27 and later income years.
250 Clause 4 amended (Application)
(1)
Replace clause 4, other than the heading, with:
This order applies to a trustee of a trust who is required to file a return, unless—
(a)
the trustee is excluded from the requirement to make a return by section 43B of the Act:
(b)
the trust is a foreign trust:
(c)
the trust is a foreign exemption trust:
(d)
the trustees of the trust are incorporated as a board under the Charitable Trusts Act 1957:
(e)
the trust is a tax charity registered under the Charities Act 2005:
(f)
the trustee is eligible under section HF 2 of the Income Tax Act 2007 to choose under section HF 11 of that Act to become a Maori authority:
(g)
the trust is a widely-held superannuation fund:
(h)
the trust is an exempt ESS:
(i)
the trustee is a debt funding special purpose vehicle:
(j)
the trustee is a lines trust established under the Energy Companies Act 1992.
(2)
Subsection (1) applies for the 2026–27 and later income years.
251 Clause 5 amended (Minimum requirements for preparing financial statements)
(1)
In clause 5(2)(a), delete “under section 59BA of the Act”
.
(2)
Subsection (1) applies for the 2026–27 and later income years.
Amendment to Tax Administration (Correction of Errors in Employment Income Information) Regulations 2019
252 Amendment to Tax Administration (Correction of Errors in Employment Income Information) Regulations 2019
(1)
This section amends the Tax Administration (Correction of Errors in Employment Income Information) Regulations 2019.
(2)
In regulation 4(10), replace “in accordance with subclause (2)(a) or (b)”
with “in accordance with a method referred to in subclause (2)(a) or (b)”
.
Revocations
253 Revocations
The following regulations are revoked:
(a)
(c)
Taxation (Use of Money Interest Rates) Regulations 1998 (SR 1998/105).
Schedule 1 Consequential amendments related to repeal of sections in subpart RM of Income Tax Act 2007
Part AAmendments to Income Tax Act 2007
Section CD 40 amended (Adjustment if dividend recovered by company)
In section CD 40(4), replace “RM 2 to RM 5”
with “RM 2 and RM 4”
and delete “and RM 18 to RM 21 (which relate to limits on refunds), but subject to the other provisions of this Act”
.
Section CD 41 amended (Adjustment if amount repaid later)
In the heading to section CD 41(5), replace “RM 2 to RM 5”
with “RM 2 and RM 4”
.
In section CD 41(5), replace “RM 2 to RM 5”
with “RM 2 and RM 4”
.
Section OB 71 amended (Imputation additional tax on leaving group of companies)
In section OB 71(5), replace “sections RM 2, RM 4, and RM 5”
with “section RM 2 or RM 4”
.
Section OB 72 amended (Imputation additional tax on joining wholly-owned group)
In section OB 72(6), replace “sections RM 2, RM 4, and RM 5”
with “section RM 2 or RM 4”
.
Section OB 72B amended (Limit on using entitlement to refund after joining wholly-owned group)
In section OB 72B(3)(a)(ii), replace “sections RM 2, RM 4, and RM 5”
with “section RM 2 or RM 4”
.
In section OB 72B(6), replace “sections RM 2, RM 4, and RM 5”
with “section RM 2 or RM 4”
.
Section OP 6 amended (Provisions applying to consolidated imputation groups)
In section OP 6(7), replace “, RM 4, or RM 5”
with “or RM 4”
.
Section RM 10 amended (Using refund to satisfy tax liability)
In section RM 10(1), replace “sections RM 2, RM 4, and RM 5”
with “section RM 2 or RM 4”
.
Section RM 13 amended (Limits on refunds for ICA companies)
In section RM 13(1)(a), replace “sections RM 2, RM 4, and RM 5”
with “section RM 2 or RM 4”
.
Section RM 17 amended (Treatment of further income tax paid)
In section RM 17(1), replace “, RM 4, and RM 5”
with “and RM 4”
.
Section RM 22 amended (Limits on refunds for Maori authorities)
In section RM 22(1), replace “sections RM 2, RM 4, and RM 5”
with “section RM 2 or RM 4”
.
Section RM 23 amended (Limits on refunds when Maori authority stops being Maori authority)
In section RM 23(1), replace “, RM 4, or RM 5”
with “or RM 4”
.
Section RM 26 amended (Treatment of further income tax paid)
In section RM 26(1), replace “, RM 4, and RM 5”
with “and RM 4”
.
Section RM 33 amended (Limits on refunds for certain unit trusts and group investment funds)
In section RM 33(1)(a), replace “, RM 4, or RM 5”
with “or RM 4”
.
Schedule 1 amended (Basic tax rates: income tax, ESCT, RSCT, RWT, and attributed fringe benefits)
In schedule 1, part E, delete “RM 21,”
.
Part BAmendments to Tax Administration Act 1994
Section 184 amended (Refund of tax paid on income subsequently exempted by Order in Council)
In section 184, delete “RM 5,”
.
Section 184AA amended (Refund of tax: deductible amounts of interest)
In section 184AA(3)(a), replace “RM 2 to RM 6”
with “RM 2 and RM 4”
.
Schedule 2 Consequential amendments to clarify Commissioner’s requirements to publish
Part AAmendments to Goods and Services Tax Act 1985
Section 20 amended (Calculation of tax payable)
In section 20(3CG)(c), replace “available to them in a publication by the Commissioner”
with “published by the Commissioner”
.
Section 21 amended (Adjustments for apportioned supplies)
In section 21(4B)(c), delete “in that publication”
.
Section 75 amended (Keeping of records)
In section 75(7)(d), replace “give public”
with “publish”
and delete “, in a publication chosen by the Commissioner”
.
Part BAmendments to Tax Administration Act 1994
Section 7AAAA amended (Administration of final-year fees-free scheme)
In section 7AAAA(3), delete “, on an internet site administered by the Commissioner,”
.
Section 7AAA amended (Administration of cost of living payments scheme)
In section 7AAA(3), delete “, on an internet site administered by the Commissioner,”
.
Section 7AAB amended (Authorisation to make COVID-19 support payments)
In section 7AAB(3)(c), delete “, on an internet site administered by the Commissioner,”
.
Section 22 amended (Keeping of business and other records)
In section 22(9)(d), replace “give public”
with “publish”
and delete “, in a publication chosen by the Commissioner”
.
Section 37 amended (Dates by which annual returns to be furnished)
Replace section 37(2) with:
(2)
The Commissioner must publish the dates by which returns are required to be furnished. A failure to publish the dates does not affect a person’s obligation to furnish a return within the time prescribed by this section.
Section 41A amended (Returns in relation to charitable or other public benefit gifts)
In section 41A(14), delete “ in a publication chosen by the Commissioner,”
.
Section 68CE amended (Research and development tax credits: publication of details)
In section 68CE(1), delete “, in a publication chosen by the Commissioner,”
.
Section 90A amended (Determinations in relation to apportionment of interest costs)
In section 90A(7), delete “, in a publication chosen by the Commissioner and”
.
Section 91AA amended (Determinations in relation to standard-cost household service)
In section 91AA(6), delete “, in a publication chosen by the Commissioner”
.
Section 91AAB amended (Determinations relating to types and diminishing values of listed horticultural plants)
Replace section 91AAB(6) with:
(6)
Within 30 days of issuing a determination under this section, the Commissioner must publish the determination.
Section 91AABB amended (Determinations relating to monetary threshold in extended model reporting standard for digital platforms)
In section 91AABB(6), replace “a notice in a publication chosen by the Commissioner setting out the New Zealand dollar equivalent that is the subject of the determination, any necessary amendment caused by exchange rate fluctuations, and the periods for which the threshold is to apply”
with “the determination”
.
Section 91AAG amended (Determination on special rates and provisional rates)
In section 91AAG(7), replace “of publication of the Gazette in which notification”
with “the Commissioner publishes the notice of revocation”
and delete “is made”
.
Section 91AAI amended (Effect on special rate of change in circumstances)
Replace section 91AAI(4)(b) with:
(b)
if the notice is published by the Commissioner, on the day after it is published.
Section 91AAM amended (Applications for determinations)
Replace section 91AAM(4) with:
(4)
Within 30 days of issuing a determination under section 91AAG(4) or revoking a determination under section 91AAG(7) that is expressed to apply to a class of persons, the Commissioner must publish the determination or notice of revocation.
Section 91AAN amended (Determinations on rates for diminishing value of environmental expenditure)
Replace section 91AAN(9) with:
(9)
Within 30 days of issuing a determination under subsection (1) that is expressed to apply to a class of persons, the Commissioner must publish the determination.
Section 91AAO amended (Determination on type of interest in FIF and use of fair dividend rate method)
Replace section 91AAO(5) with:
(5)
The Commissioner must publish the determination within 30 days of making the determination.
Section 91AAQ amended (Determination on insurer as non-attributing active CFC)
In section 91AAQ(8), delete “in a publication chosen”
.
Section 91AAS amended (Declaration of emergency event for purposes of family scheme income)
In section 91AAS(4), delete “in a publication chosen by the Commissioner”
.
Section 91AAT amended (Determinations relating to certain employment expenditure)
Replace section 91AAT(7) with:
(7)
Within 30 days of issuing or changing a determination under this section, the Commissioner must publish the new or changed determination.
Section 91AAX amended (Accounting and rate determinations relating to AIM method)
In section 91AAX(4), replace “The Commissioner must give at least 120 days notice of the implementation date of that later determination, in a publication chosen by the Commissioner.”
with “The Commissioner must publish the implementation date of that later determination at least 120 days before that date.”
Section 91AAY amended (Class of taxpayers that must not use AIM method)
In section 91AAY(4), replace “The Commissioner must give at least 120 days notice of the implementation date of that later determination, in a publication chosen by the Commissioner.”
with “The Commissioner must publish the implementation date of that later determination at least 120 days before that date.”
Section 91AAZ amended (AIM method information)
In section 91AAZ(4), replace “The Commissioner must give at least 120 days notice of the implementation date of that later determination, in a publication chosen by the Commissioner.”
with “The Commissioner must publish the implementation date of that later determination at least 120 days before that date.”
Section 91DA amended (Content and notification of a public ruling)
In the heading to section 91DA, replace “notification”
with “publication”
.
Repeal section 91DA(2) and (3).
In section 91DA(4), delete “, in full, in a publication of the department”
.
Section 91DD amended (Extension of a public ruling)
In section 91DD(1), delete “in a publication chosen by the Commissioner”
.
Section 91DE amended (Withdrawal of a public ruling)
Replace section 91DE(2) with:
(2)
The Commissioner must publish a notice of the withdrawal with adequate notice.
In section 91DE(3), replace “given”
with “published”
.
Section 91FH amended (Content and notification of a product ruling)
In the heading to section 91FH, replace “notification”
with “publication”
.
Replace section 91FH(4) and (5) with:
(4)
If the applicant applies for earlier publication, the Commissioner must publish the product ruling as soon as possible.
(5)
After the 2-month period has ended, the Commissioner must publish each product ruling.
Section 91FJ amended (Withdrawal of a product ruling)
Replace section 91FJ(2) with:
(2)
The Commissioner must publish a notice of the withdrawal with adequate notice.
In section 91FJ(3), replace “given”
with “published”
.
Section 91GG amended (Notification of status ruling)
In the heading to section 91GG, replace “Notification”
with “Publication”
.
Replace section 91GG(2) with:
(2)
In the case of a status ruling on a product ruling, the Commissioner must also publish the status ruling.
In section 91GG(3), delete “notify the making of and”
.
Section 124ZC amended (Publication of approval or revocation)
In section 124ZC, delete “in a publication chosen by the Commissioner”
.
Section 124ZH amended (Approved research providers)
In section 124ZH(6), delete “, in a publication chosen by the Commissioner”
.
Section 124ZI amended (Certificates for research and development)
In section 124ZI(5) and (6), delete “in a publication chosen by the Commissioner”
.
Section 185F amended (Permitted choices in relation to FATCA agreement)
In section 185F(4), delete “in a publication chosen by the Commissioner”
.
Schedule 7 amended (Disclosure rules)
In clause 18, replace “listed by the Commissioner in a publication chosen”
with “published in a list”
.
In clause 33(8), delete “, in a publication chosen by the Commissioner,”
.
Replace clause 33(10)(c) with:
(c)
has had its name published by the Commissioner.
Legislative history
26 August 2025 |
Introduction (Bill 199–1) |
|
10 September 2025 |
First reading and referral to Finance and Expenditure Committee |
|
9 March 2026 |
Reported from Finance and Expenditure Committee (Bill 199–2) |
|
24 March 2026 |
Second reading |
|
25 March 2026 |
Committee of the whole House (Bill 199–3) |
|
26 March 2026 |
Third reading |
|
30 March 2026 |
Royal assent |
This Act is administered by the Inland Revenue Department.
Versions
Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Act 2026
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