New Zealand’s Minister of Revenue has introduced a tax policy work programme on 13 November 2024, which aims to simplify tax and reduce compliance costs, address integrity risks, and improve fiscal sustainability to rebuild the economy.

The government is also committed to transparency through public engagement in tax policy design via the Generic Tax Policy Process.

The work programme will be updated periodically to reflect the government’s current priorities.

The provisions of the policy are summarised below:

Economic growth and productivity 

  • Improvements to the employee share scheme regime, including a threshold increase for exempt schemes;
  • Generic response measures for emergency events;
  • Exploring compliance cost reductions, including improving tax compliance for small businesses;
  • Fringe Benefits Tax review;
  • Reviewing thin capitalisation settings for infrastructure;
  • Reviewing the Foreign Investment Fund tax rules Supporting the transition to digital tax administration for tax intermediaries;
  • Reviewing the GST rules for joint ventures;
  • Simplifying tax compliance for Māori authorities;
  • Work to find a multilateral solution to the challenges the digital economy poses to international taxation (OECD Pillar One and Pillar Two work)

Modernising the tax system 

  • Reviewing exempting the New Zealand Superannuation Fund from income tax;
  • Reviewing the Commissioner’s power to collect information for policy purposes;
  • Donee status for overseas-focused organisations (schedule 32)
  • Remedial work programme

Integrity of the tax system

  • Clarifying that banks and licenced deposit takers cannot be PIEs and that non-eligible income cannot be transferred into a PIE using related party interest payments;
  • Implementation of the Crypto-asset Reporting Framework;
  • Trust disclosures post-implementation review;
  • Policy options to support wider Inland Revenue compliance work and reduce tax debt Reviewing elements of charities and not-for-profits;
  • Clarifying the income tax treatment of software development expenditure.

Strengthening international connections 

  • Simplification of the Approved Issuer Levy reporting, including retrospective registration;
  • Inwards pension transfers and locked-in KiwiSaver changes;
  • Simplifying the tax rules for non-resident contractors;
  • Double tax agreement negotiations.