The Commissioner of Inland Revenue (CIR) has revealed the 2025 International tax disclosure exemption on 31 March 2025.

Section 61 of the Tax Administration Act 1994 (“TAA”) requires taxpayers to disclose interests in foreign entities. Section 61(1) of the TAA states that a person who has a control or income interest in a foreign company or an attributing interest in a foreign investment fund (“FIF”) at any time during the income year must disclose the interest held. In the case of partnerships, disclosure needs to be made by the individual partners in the partnership. The partnership itself is not required to be disclosed.

Section 61(2) of the TAA allows the Commissioner of Inland Revenue to exempt any person or class of persons from this requirement if disclosure is not necessary for the administration of the international tax rules (as defined in section YA 1) contained in the Income Tax Act 2007 (“ITA”). To balance the revenue forecasting and risk assessment needs of the Commissioner with the compliance costs of taxpayers providing the information, the Commissioner has issued an international tax disclosure exemption under section 61(2) of the TAA that applies for the income year corresponding to the tax year that ended 31 March 2025. This exemption may be cited as “International Tax Disclosure Exemption ITR36 “(“the 2025 disclosure exemption”), and the full text appears at the end of this item.

In summary, the 2025 disclosure exemption removes the requirement of a resident to disclose:  

An interest in a foreign company if the resident has an income interest of less than 10% in that company and either that income interest is not an attributing interest in a FIF or it falls within the NZD 50,000 de minimis exemption (see section CQ 5(1)(d) and section DN 6(1)(d) of the ITA).

The de minimis exemption does not apply to a person that has opted out of the de minimis threshold by Page 2 of 10 ITR36 | 31 March 2025 including in the income tax return for the income year an amount of FIF income or loss.  If the resident is not a widely-held entity, an attributing interest in a FIF that is a direct income interest of less than 10%, if the foreign entity is incorporated (in the case of a company) or otherwise tax resident in a treaty country or territory, and the fair dividend rate or comparative value method of calculation is used.

If the resident is a widely-held entity, an attributing interest in a FIF that is a direct income interest of less than 10% (or a direct income interest in a foreign PIE equivalent) if the fair dividend rate or comparative value method is used for the interest. The resident is instead required to disclose the end-of-year New Zealand dollar market value of all such investments split by the jurisdiction in which the attributing interest in a FIF is held or listed.

The 2025 disclosure exemption also removes the requirement for a non-resident or transitional resident to disclose interests held in foreign companies and FIFs.