Tax Watch: 1 April 2026

In-Work Tax Credit (IWTC): Temporary relief for rising fuel costs is here

The IWTC for working families with dependent children will temporarily increase by $50 per week; most eligible families will receive higher payments from 7 or 14 April depending on their payment cycle. This will run until 31 May 2026, but may end earlier if petrol prices fall below $3 per litre for four consecutive weeks.

Tax changes made to boost infrastructure investment

An amendment to New Zealand’s current thin captialistion rules is being implemented to encourage more investment in New Zealand infrastructure. This means an eligible entity can use non-standard thin captialisation rules to allow for interest deductions on higher levels of debt before the usual restrictions apply.

The requirements of the amendment have been drafted to ensure it specifically targets investment in New Zealand’s infrastructure and therefore the amended thin captialisation rule will only apply to certain entities in relation to specific projects. The standard thin captialisation rules will continue to apply as normal for all other entities.

GST treatment of payment services: Final guidance now available

IR has released final guidance about how GST applies to payment service providers (PSPs) and buy now, pay later (BNPL) services. The guidance applies from the date it was issued (24 March 2026) and explains when these services may be either:

• GST exempt: No GST charged, but there’s a limited ability to claim GST on costs
• Zero rated: GST is charged at 0% but it can be claimed on costs The GST outcome depends on whether a settlement/payment service is being offered, or if the service is a single supply or multiple separate supplies.

Your existing GST treatment may need to be reviewed to ensure it aligns with this interpretation, as it could impact past and future positions.

Income tax, international, and ‘best of the rest’ IR webinars now available 

IR has released a new webinar series to explain changes commencing 1 April 2026; these complement the GST and employer webinars included in the 18 March edition of Tax Watch. The series includes:

• Changes coming for income tax
• Key updates for international tax
• Best of the rest: Financial arrangement rules, credit reporting formal notification requirements, Best Start and unclaimed money

Non-active entity? You no longer need to file nil income tax returns

If your entity meets IR’s non-active criteria and you have notified them of this, you don’t have to file an annual return. You just need to ensure your entity’s status is correctly recorded to avoid unnecessary filing obligations.

Debt collection activity and compliance campaigns

IR is continuing to collect debt and implement targeted compliance campaigns in certain sectors like construction. It is continuing its monitoring and enforcement to focus on unpaid GST and PAYE, so you should review your tax position and engage early with IR to manage any liabilities and avoid penalties. 

Former tax agent sentenced to home detention - COVID support offending

A former tax agent has been sentenced to home detention for making fraudulent claims under pandemic support schemes and used the money obtained on personal spending. He is bankrupt, so the court did not order reparation, but some of the money had been repaid.

Amendments to the Common Reporting Standard (CRS)

CRS scope and due diligence requirements change from 1 April 2026, including indirect crypto exposures, specified e-money products and central bank digital currencies. This applies from the CRS period ending 31 March 2027; the current reporting period remains unchanged.