New Zealand Inland Revenue has confirmed that the Annual Rates for 2025–26, Compliance Simplification, Remedial Measures) Act 2026 received Royal assent on 30 March 2026, enacting it into law.
New Zealand Inland Revenue has announced, on 31 March 2026, that the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill received Royal assent on 30 March 2026, enacting it into law.
The legislation introduces a wide-ranging package of tax, GST, and social policy amendments, introducing significant changes to the Income Tax Act 2007 and the Goods and Services Tax Act 1985 as part of its April 2026 legislative update.
The reforms cover areas including foreign investment fund calculations, tax treatment of non-resident visitors, employee gift cards, infrastructure financing, GST rules for joint ventures, and enhanced information-sharing powers for Inland Revenue.
Alongside these statutory changes, the update also delivers a series of policy and system measures affecting KiwiSaver, student loans, Working for Families, and overseas pension tax payments, with commencement dates ranging from immediate effect on 31 March 2026 to phased implementation through 2028.
Key Amendments to the Income Tax Act 2007
- New Investment Assets: The Act introduces rules for “change of use” regarding new investment assets. If a person claims a deduction for an asset under section DI 5 but later changes the asset’s use in a way that would have reduced that deduction by 25% or more, they must return the difference as income.
- Revenue Account Method (RAM): A significant addition is the revenue account method for calculating Foreign Investment Fund (FIF) income or loss. This method is available to certain “RAM taxpayers”—generally natural persons who were non-residents for at least five years before becoming New Zealand residents on or after 1 April 2024.
- Non-Resident Visitors: New rules define a “non-resident visitor” as a natural person visiting New Zealand for 275 days or fewer in an 18-month period. Income derived by these visitors from performing personal or professional services is exempt if it is liable for tax in their home country.
- Gift Cards: Provisions are added to treat gift cards provided to employees as a fringe benefit unless the employer chooses to treat them as employment income. The value of the benefit is the amount loaded onto the card.
- Infrastructure Funding: The Act provides an interest apportionment exemption for “eligible infrastructure entities” that carry on projects involving essential public services (e.g., transport, energy, water, or social infrastructure).
Amendments to the Goods and Services Tax Act 1985
- Flow-through Joint Ventures: The Act introduces a new category of “flow-through joint ventures”. Members can elect this treatment, which allows joint venture supplies and acquisitions to be treated as being made or received by the individual members rather than a single unincorporated body.
- Registration Thresholds for Non-Residents: For non-resident visitors, the value of certain zero-rated services is excluded when determining if they must register for GST.
Tax administration and social policy changes
- Publishing Requirements: A new section (14H) defines “publishing” for the Commissioner, requiring information to be made available to the public on an internet site maintained by Inland Revenue.
- Disclosure to government agencies: The Commissioner is authorised to disclose sensitive revenue information to specific government agencies (such as the Police, Health NZ, or ACC) to assist with detecting crime or determining eligibility for government assistance, provided a formal agreement is in place.
- Student loan scheme: New measures allow for the cancellation of loan interest and late payment interest if a borrower enters into and complies with an instalment arrangement to repay an agreed amount.
- KiwiSaver: The Act adjusts certain requirements for complying fund rules, including a transition of employee contribution rates toward 4%.
Alongside these legislative amendments, the April 2026 changes also include other policy and remedial items, system enhancements, and the annual rate and threshold updates. Changes include (but are not limited to):
- A new option of ‘scheme pays’ is available for paying tax on some overseas pensions, with tax withheld at a flat rate of 28% from the transferred pension amount.
- The KiwiSaver default minimum contribution rate for both employers and employees increases to 3.5% effective from the 1st pay date on or after 1 April 2026.
- Employees aged 16 and 17 who are enrolled in KiwiSaver will be eligible for compulsory employer contributions.
- Some property income details will automatically pre-fill income tax returns using information from IR3R and IR833 attachments, which are now filed first. The figures can still be reviewed and updated if needed.
- Best Start will be income tested from the 1st year, aligning it with the approach already used in years two and three.
- The in-work tax credit will temporarily increase by NZD 50 a week, from NZD 97 to NZD 147, until 31 March 2027 or until the price of 91 petrol is below NZD 3 per litre for four consecutive weeks (whichever is earlier).
- Student loan, ACC and Working for Families rate and threshold changes apply.
While the Act generally came into force on 31 March 2026, it contains numerous specific commencement dates. Many provisions are retrospective, dating back to 2008, 2011, or 2024, while others are scheduled to take effect in April 2027 or 2028.
