This year, IR has progressed a number of items on the Tax and Social Policy Work Programme and provided advice on the design and implementation of Budget initiatives and annual taxation bills.
Some items were included in annual legislation that enables tax changes and we have publicly consulted on others. Some items are being advanced under Budget 2025 such as the Foreign Investment Fund rules.
Where possible, we have used the Generic Tax Policy Process in our policy development. The process provides opportunities for the public and tax specialists to engage, particularly on major policy changes.
The Government has stated its commitment to using the process and public engagement on the design of tax policy. It acknowledged that public consultation plays an important role in creating and sustaining a durable, widely accepted tax system.
Consulting the public
IR consulted with New Zealanders on several policy priorities this year, a number of which focus on enabling economic growth and productivity. Consultation included:
- Reforms of the GST rules for joint ventures, with the aim of ensuring they are fit for purpose for joint venture arrangements and minimise compliance costs.
- Reviewing the fringe benefit tax regime, with a focus on simplifying rules and reducing compliance costs.
- Addressing an aspect of foreign investment fund rules, specifically whether imposing tax on unrealised income in the current rules could be deterring some people from settling in New Zealand.
- Looking at a taxation timing issue in the employee share schemes offered by start-up companies—these schemes are a useful way to incentivise and remunerate employees, with $533 million in taxable benefits going to 15,730 people in the 2022 tax year.
- Understanding how the current settings on thin capitalisation might be discouraging foreign investors from investing in New Zealand infrastructure projects, and whether changes to settings could lead to more investment. Thin capitalisation rules form part of New Zealand’s international tax rules. They place limits on how much debt a non-resident can put into their New Zealand investments.
A review of taxation of charities and the not-for-profit sector received 900 public submissions, which is the highest number we’ve received since a previous charity tax consultation in 2000. This indicates New Zealanders’ interest in this subject and the importance of the Generic Tax Policy Process in enabling the public to engage on potential changes.
You can read more on pages 18 and 19 about a set of proposals to make the Working for Families Tax Credits scheme more accurate and prevent families from going into debt.
Changes brought in with this year’s annual tax legislation
The Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 was introduced in August 2024 and received Royal assent on 29 March 2025.
The Act sets the annual rates of income tax for the 2024–25 tax year. It introduced other notable changes that legislated items on the Tax and Social Policy Work Programme and some Budget 2024 initiatives.
Crypto-asset Reporting Framework
In November 2024, New Zealand and 47 other jurisdictions signed the Crypto Asset Reporting Framework Multilateral Competent Authority Agreement. This year, rules were enacted to implement the framework.
The framework is a new international standard designed to ensure the automatic exchange of key information on crypto-asset transactions between tax authorities. It was developed by the OECD in response to the growth of the crypto-asset market. It aims to improve tax transparency and compliance in relation to the reporting of income for tax purposes from crypto-assets.
We estimate that over of 80% of these transactions undertaken by New Zealand tax residents occur via overseas channels. IR will be able to cross-check compliance of crypto-users through exchanging information with our tax treaty partners. The information exchange supplements our existing crypto-asset information and begins in September 2027.
Final-year Fees Free
A Budget 2024 initiative changed the tertiary First-year Fees Free Scheme to one where the final year is free. The Government’s intent in doing so is to help incentivise learners to finish their studies.
Learners entering their final year of study from January 2025 are eligible, with payments being made once they have finished. IR has been preparing our systems to make payments from January 2026.
Streamlined tax relief response
Government has provided tax relief during past emergency events and recovery phases, depending on the nature of the event. These responses were initiated through a combination of Commissioner of Inland Revenue discretions, Orders in Council and primary legislative amendments.
A more streamlined, timely process is now in place to activate measures that previously would have required primary legislation. Ministers still have discretion over which measures to apply to any particular emergency.
Other changes in the Act included:
- Introducing ‘scheme pays’ for the taxation of transfers from recognised overseas pension schemes. This better enables transferees to meet their obligations.
- Authorising a one-off information-sharing arrangement with the Ministry of Business, Innovation and Employment (MBIE). This is to encourage uptake of the New Zealand Business Number and improve MBIE’s ability to support business confidence and certainty and create smoother business interactions.
- Allowing those under 16 to enrol in KiwiSaver, provided a guardian contracts directly with a provider.
Reviewing the trust disclosures
This year, IR published a review of changes to disclosures for domestic trusts that followed the introduction of a new top tax rate of 39% on personal income over $180,000 in 2020.
The changes increased disclosure requirements, which were put in place to support the Commissioner’s ability to assess compliance with the new rate and to understand and monitor the use of structures and entities by trusts.
Repeal of the trust disclosures changes was included in a Bill before the House in August 2025. The Commissioner is considering what information IR will continue to collect.
Strengthening international connections
IR advises the Government on international tax issues. We also negotiate double tax agreements with other countries. These agreements prevent people, such as non-resident taxpayers or New Zealanders living and earning income overseas, from being taxed in 2 countries on the same income.
New Zealand has a network of 41 agreements in force with its main trading and investment partners. This year, we continued to negotiate replacement agreements with Australia and the UK and new ones with European countries including Croatia, Slovenia, Poland and Portugal.
Remedial work programme
Remedial amendments play an important role in maintaining the tax system. Tax legislation needs to be regularly updated in response to changing technology, business practices, jurisprudence or other factors—this helps to ensure the system remains fit for purpose in a changing world.
Our remedial work programme for 2024–25 focused on priorities in this area. A public remedials log informs the public about remedial legislative issues that IR has considered and can be found at