An Amendment Paper to the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill was released by the Minister of Revenue on 19 March 2026. The proposals include:
a new thin capitalisation rule to better accommodate qualifying foreign investment in New Zealand infrastructure
a legislative discretion for the Commissioner of Inland Revenue to provide some relief from interest that applies to a student loan when a borrower is based overseas
extending the time to use tax pooling to satisfy income tax debt for the 2022–23 and 2023–24 income years, subject to eligibility criteria
allowing the New Zealand Superannuation Fund and related entities to pay income tax annually, aligning treatment with similar investment entities.
Croatia tables law to ratify DTAs with Australia and NZ
This month, the Croatian Government tabled legislation for the ratification of new double tax agreements signed with Australia and New Zealand in November 2025. This will considerably lower tax rates on cross-border trade and investment, which can be as high as 30%.
In Australia the maximum withholding tax rates that may be charged at source will be reduced to 0%, 5%, or 10% percent for dividends income; 0% or 10% for interest income; and 10% for royalties.
In New Zealand withholding tax on dividends income will be capped at rates of 5% or 15% percent, and at 10% for interest and royalties income.
A construction permanent establishment (PE) will also be created after nine months in Australia and after 12 months in New Zealand,
Pensions paid to a Croatian resident from Australia or New Zealand will be taxable in Croatia.
Reminder from IR: Nonpayment of PAYE a serious offence
Inland Revenue has issued an alert warning employers that deducting PAYE (and related amounts such as KiwiSaver and student loan deductions) and not remitting them by the due date is a criminal offence. It emphasises this can lead to prosecution and carries a maximum sentence of up to five years’ imprisonment; those who aid, abet, incite or conspire (including company directors who decide not to pay) can also be charged.
In a recent media release, IR states This is an active enforcement area and points to recent prosecutions, including a Christchurch case described by the court as “the worst tax offending of its kind,” which resulted in three years’ imprisonment for failing to pass on $1.6m+ of employee deductions; it also references the 2010 James case to highlight the seriousness of such offending.
Two years' prison time for tax and COVID offending
A person has been imprisoned following charges which involved false GST and income tax returns, falsified documents/bank statements, and dishonest applications to IR. A company structure was set up which the offender continued to control after stepping down as director. IR detected this behaviour and stopped further payments.
New text and Select Committee commentary is now available and includes changes to short-stay non-resident visitor rules, FIF revenue account method, employment income and FBT clarifications, vehicle logbook updates, and gift card treatment.
Earlier this year, Inland Revenue released a consultation paper about the tax treatment of software expenditure. If your business continues to invest in SaaS and other cloud platforms, potential reforms aimed at simplifying the rules and reducing compliance costs could be on the way. Tax Partner, Sam O’Connor explains why the treatment of software is under review and the practical steps your business can take now to stay ahead of any changes that might be on the horizon.
A global minimum tax has been introduced, which ensures that large multinationals pay at least 15% tax in all the jurisdictions they operate. This will have the effect of “reducing the incentive for profit shifting and placing a floor under tax competition, bringing an end to the race to the bottom on corporate tax rates,” as the OECD explains.
For retirement villages, there’s one area of complexity where the correct treatment can really pay dividends, and that’s GST. However, it can get complicated for retirement village operators; it’s easy to get wrong and can be very expensive to fix.
