New Zealand

New Tax Bill

The Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill (the Tax Bill), introduced in August 2025 is currently before the Finance and Expenditure Committee in New Zealand’s Parliament.

The Tax Bill includes a number of measures including:

• Overhauling the tax treatment of visitors to New Zealand.

• Introduction of a revenue account method for foreign investment fund income for new migrants and returning New Zealanders.

• Proposed changes to the tax treatment of employee share schemes.

• Some minor amendments to fringe benefit tax, noting the more significant developments signalled earlier in the year have seemingly stalled.

• Some other smaller remedials and amendments.

More details on the Tax Bill are available in our Tax Tips publication here: https://www.pwc.co.nz/insights-and-publications/subscribed-publications/tax-tips/tax-bill-key-proposed-changes-and-implications.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 signalled their intention to move forward with reforms that were consulted on in early 2025, however these have not been included in the Tax Bill. Further work is being undertaken by officials in respect of the broader reforms including aligning the calculation of FBT for vehicles more closely with the actual value of providing vehicles and other proposals aiming to reduce compliance burdens and eliminate outdated exceptions. The Tax Bill, expected to be enacted in March 2026, has however progressed some smaller amendments. These amendments include bringing gift cards into the ambit of the FBT rules (with the law change expected to be backdated to April 2025 once enacted), giving employers the choice to treat reimbursements for benefits as unclassified benefits under the FBT rules, and rules around the attribution of global insurance policies.

Foreign investment funds (FIFs) and the Revenue Account Method (RAM)

The FIF regime applies to New Zealand tax residents with interests in certain foreign entities (that are not controlled foreign companies). 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 rules to make New Zealand more attractive to migrants; as reflected by the inclusion of a proposed ’Revenue Account Method‘ in the Tax Bill allowing qualifying new migrants to calculate FIF income on a realisation basis.

Qualifying migrants include natural persons who become New Zealand tax resident on or after 1 April 2024, provided they were non-resident for at least five years before becoming a New Zealand tax resident. RAM may also apply to family trusts where the principal settlor meets the same criteria.  

Under the RAM eligible taxpayers will be taxed on dividends received and 70% of any realised gain on disposal of qualifying foreign shares. Similarly, 70% of a loss on disposal is able to offset future RAM gains. As an integrity measure, losses cannot be offset against dividend income, but they can be carried forward. The RAM is expected to generally be limited to shares in foreign companies acquired before becoming a New Zealand tax resident and generally excludes listed shares and most managed funds. Eligible taxpayers will need to elect to apply the RAM.

As mentioned above, the Tax Bill is expected to be enacted before the end of March 2026.

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 Organisation for Economic Co-operation and Development’s (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.

A multinational business subject to the Pillar Two rules with a New Zealand subsidiary, branch or permanent establishment is likely, at a minimum, to need to register with Inland Revenue. 

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, Fiji, Germany, Hungary, Iceland, the Netherlands, Portugal, Slovenia, South Korea, and the United Kingdom. New Zealand has DTAs negotiated with Croatia and Iceland which have been signed but is not yet in force, with an effective date to be determined.