Pillar Two registrations now open
Inland Revenue’s GloBE system is now open for registrations for Pillar Two multinational entities with a presence in NZ. For more information including registration and filing and due dates, Grant Thornton transfer pricing expert Alejandro Ces has prepared some insights and guidance for in-scope multinationals.
Tax pooling pilot for certain income tax debt
Inland Revenue is piloting an extension of the tax pooling regime to allow the use of tax pooling intermediaries to pay overdue income tax for the 2022–23 and 2023–24 income years. It will give eligible taxpayers more time to meet their tax obligations, and reduce penalties and interest. It runs for contracts entered into by 1 October 2026 and settled by 1 October 2027, and if successful, IR may make the changes permanent.
Taxation (Annual Rates for 2025-26, Compliance Simplification, and Remedial Measures) Bill enacted
The Bill received Royal assent on 29 March 2026 with the aim of reducing administrative tax burdens and making tax rules easier to apply. It sets out the income tax rates for the 2025–26 tax year and implements a package of technical fixes and compliance simplification measures across income tax, GST, tax administration, KiwiSaver, FBT and related social policy rules.
A spotlight on FBT
The changes give employers greater flexibility to choose whether some benefits are taxed under FBT or treated as salary or wages with PAYE deducted. Employers are encouraged to review their current treatment of benefits to ensure they are using the most appropriate approach.
Gift cards
Employers can choose to either apply the FBT rules to closed loop gift cards or treat them as employment income with PAYE deducted. Gift cards can be treated as unclassified benefits under FBT and exempt from tax if they fall below the relevant limits (effective from 16 April 2025).
Employee reimbursements
From 1 April 2026, employers can choose to tax employee reimbursements that would otherwise be unclassified benefits either under the FBT rules or as employment income with PAYE deducted, giving greater flexibility in how these payments are treated.
Motor vehicles and Investment Boost
From 1 April 2026, where a motor vehicle’s tax book value includes an Investment Boost reduction, new FBT calculation rates apply. A minimum tax book value of $7,317 is set for these vehicles.
Health and safety equipment
Unbranded personal protective equipment provided to employees is exempt from fringe benefit tax, confirming that FBT does not apply to these items when used for health and safety purposes. This change applies from 1 April 2008.
Inland Revenue consultations currently open for comment
ED0261: Exposure Draft - options for relief from tax debt
Inland Revenue’s proposed update to its standard practice statement explains how the Commissioner considers requests for relief from tax debt including tax, interest, and penalties under the Tax Administration Act 1994. It outlines options such as instalment arrangements, write offs for serious hardship, and remissions. The statement also covers the factors Inland Revenue will weigh when deciding whether relief is appropriate, while also noting recovery action may still occur in some cases. The draft guidance is open for public consultation until 8 May 2026.
PUB00544: Exposure Draft - income tax – bare trusts and mortgages
This consultation document addresses how bare trusts are treated for income tax purposes when the trust property is subject to a mortgage. It confirms a bare trust can still exist in these circumstances, and the beneficiary (not the bare trustee) is treated as holding the property and the mortgage for tax purposes where the trustee is acting solely on the beneficiary’s instructions. Inland Revenue is seeking feedback on this draft guidance; consultation closes 11 May 2026.