Tax Watch: 17 July 2026

When a disposal of land is part of a profit-making undertaking or scheme subject to income tax

Inland Revenue has released a revised exposure draft PUB00519 for a second round of consultation following initial submissions in late 2024. It considers the interaction between the specific land sale rules and the general profit-making undertaking or scheme provision in section CB 3 of the Income Tax Act 2007.

IRD's view is the land sale rules, particularly sections CB 12 and CB 13, do not provide a complete code for taxing land disposals. Instead, section CB 3 can apply independently from the land taxing provisions where a land transactions form part of a profit-making undertaking or scheme.

According to the draft, section CB 3 may apply where an arrangement is entered into with the main purpose of making a profit and the taxpayer's activities extend beyond the mere realisation of a capital asset. While the sale of a residential or business property will often remain a non-taxable capital realisation, more extensive development activities, such as subdividing land and constructing new dwellings for sale, may constitute a taxable profit-making scheme.

If finalised, the interpretation statement could expand the circumstances in which profits from land development and disposal are taxable, and has the potential to bring transactions into the tax net even where the specific land sale provisions do not apply.

The exposure draft is open for comments until 13 August 2026.

Registering new business tax accounts in myIR

Inland Revenue is continuing to streamline the way business tax accounts are registered in myIR by grouping and moving registrations into the Intermediary Centre under “client registration.” International exchange accounts (CBC, DPI, FATCA and CRS) and withholding tax accounts (AIL, RWT, NRT and IPS) have already been moved.

From 15 July 2026, this change will extend to Fringe Benefit Tax (FBT), Portfolio Investment Entity (PIE), Gaming Machine Duty (GMD) and Online Gambling Duty (OGD) accounts. From 12 September 2026 it will apply to Employer (EMP) and GST accounts. Once separated, these registrations will no longer be available through the client-level “I want to…” menu and will be managed through the Intermediary Centre.

Employer reimbursement: Kilometre rate guidance

Due to recent fuel price movements, IRD is considering whether additional guidance is required for employer reimbursements from the 2027 income year. Annual kilometre rates are currently based on vehicle cost data from the previous income year, meaning they may not always align with current operating costs when reimbursements are paid.

In the meantime, employers can continue to use the published 2025–26 kilometre rates or another method that reasonably estimates the costs incurred by employees when using their private vehicles for business purposes.

More automated phone reminders from IRD

From 1 July 2026 IRD will be contacting groups of taxpayers who have overdue tax of over $100. They note some of these taxpayers also have overdue returns. These taxpayers will be contacted via a pre-recorded call or voicemail.

Paid parental leave increases

From 1 July 2026, eligible employees and self-employed people will have an increase in the parental leave payment from $788.66 to $811.05 per week before tax. The minimum rate for self-employed people will increase from $235 to $239.50 per week.