New Zealand
Corporate - Significant developments
Last reviewed - 09 July 2025Budget 2025
Finance Minister Nicola Willis announced the Government’s 2025 Budget on 22 May 2025. The “growth budget” includes tax announcements that focus on attracting foreign investment, encouraging spending on infrastructure and productive assets, and amending rules to attract skilled migrants.
The budget announced a number of tax related measures including:
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Investment Boost – an accelerated depreciation measure targeted at new assets.
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A review of thin capitalisation settings for infrastructure.'
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Amendments around KiwiSaver settings (a voluntary workplace-based superannuation savings scheme administered by Inland Revenue).
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Significant increases to Inland Revenue’s tax compliance and debt management activities budget.
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Signalling changes to the taxation of employee share schemes, foreign investment funds, fringe benefits tax.
More details on the tax measures included in Budget 2025 are outlined below and in subsequent sections as appropriate. You can also read our Tax Tips publication from the time of the announcement at https://www.pwc.co.nz/insights-and-publications/subscribed-publications/tax-tips/tax-tips-budget-2025-round-up-of-tax-announcements.html
Accelerated depreciation – Investment Boost
An accelerated depreciation scheme, ‘Investment Boost’, was enacted as part of the 2025 Budget legislation, aimed at promoting economic growth and encouraging companies to enhance their capital expenditure strategies.
Applicable new assets purchased or that become available for use from 22 May 2025 can be ‘partially expensed’ by allowing 20% of the cost of the asset (net of certain contributions to the cost of the asset) to be immediately deducted, on top of standard depreciation in the year the asset is acquired. Standard depreciation for the year is to be calculated on the value of the asset less the 20% deduction i.e. 80% of the asset value.
Fringe benefit tax (FBT)
The government has announced plans to move forward with reforms that were consulted on in early 2025. The Inland Revenue consultation paper suggests options including aligning the calculation of FBT for vehicles to be more closely with the actual value of providing a vehicle. The proposals is aims to reduce compliance burdens and eliminate outdated exceptions.
Foreign investment funds (FIFs)
The FIF regime subjects persons with interests in certain foreign entities (that are not controlled foreign companies) to New Zealand tax. You can find further details on the FIF regime in the group taxation section.
The Government has confirmed its intention to progress ongoing efforts to modernise FIF regulations to make New Zealand more attractive to migrants and digital nomads, however the draft legislation for these reforms is not expected to be released until later in 2025. This includes a proposed "Revenue Account Method" allowing qualifying new migrants to calculate FIF income on a realisation basis.
Interest deductibility
Interest deductibility for borrowing on residential investment property has been fully reinstated. From 1 April 2025, 100% of interest expense incurred for amounts borrowed in relation to residential property are deductible.
Implementation of the Global Anti-Base Erosion (GloBE) Rules
New Zealand implemented the GloBE Rules, a key component of the OECD’s Two-Pillar Solution to address the tax challenges of digitalisation of the economy, for income years commencing on or after 1 January 2025. See the Taxes on corporate income section for more information.
Double tax agreements (DTAs)
New Zealand is currently negotiating new and updating DTAs with Australia, Croatia, Germany, Hungary, Iceland, Portugal, Slovenia, South Korea, and the United Kingdom.