Short term visitors
From 1 April 2026, people who spend 275 days or less in New Zealand over 18 months, don’t run a business here, and come from a country with a similar tax system to NZ may qualify as non-resident visitors.
A non-resident visitor will be excluded from being New Zealand tax resident under the 183-day count test, meaning they could be treated as non-resident as long as the definition is met and will be excluded from certain tax consequences that comes with NZ tax residency.
Foreign Shares
If you are moving (or returning) to New Zealand with investments overseas, a new Revenue Account Method (RAM) could cut compliance. RAM taxes dividends plus 70% of any realised gains, replacing the complex Foreign Investment Fund (FIF) rules. The new rules apply from 1 April2025 and is available to those who become new residents on or after 1 April2024 who were non-resident for at least five years.
This will be a welcome change for those taxpayers who may currently have tax annually under the Fair Dividend Rate in New Zealand but are also taxed in another country (ie the USA) on the sale of the same shares. This also alleviates the issue of being taxed on an unrealised gain but not having the funds to pay the related tax.
While this change only applies to new migrants and returning Kiwis , we understand that work is being undertaken to consider if these rules should be widened.
GST and JVs
From 1 April 2026, unincorporated joint ventures (such as property or construction projects) can choose flow-through GST. This lets each member return GST individually, rather than through a single joint-venture GST registration.
Employee share schemes
From 1 April 2026, tax on certain employee shares can be deferred until a sale, listing, or dividend occurs. The changes apply to certain shares (ie unlisted), the company and affected employees need to agree on which shares are treated as “employee deferred shares” with notification made to IRD.
This is a positive change addressing the problem of employees receiving shares and having to pay the tax on this when they may not have the cash to do so.
Cash basis person
Some welcome news herewith the threshold as to who is a cash basis person (not having to apply the financial arrangement rules) increased. The income threshold doubles from$100,000 to $200,000, the absolute value threshold also doubles from $1m to $2mand the deferral calculation increasing from $40,000 to $100,000. The variable principal debt instrument threshold also increased from $50,000 to$100,000.
These amounts have not changed since 1999, so is a positive change with more taxpayers being able to use the cash basis method.
FBT changes
A few changes on the FBT front including providing options for calculating FBT on global insurance policies, making sure that the unclassified benefit thresholds include benefits provided to employees of associates, and treating both open and closed loop cards as subject to FBT.
Other changes
There are a few more changes that are included in the Bill which include clarifications around Investment Boost and other GST matters which we haven’t covered in our article.
For those interested, the Bill can be found here. The Bill will go through its various readings next and expected to be passed early next year.
As there are a lot more detail that goes with the above proposed changes, we recommend coming and speaking to your PKF Kendons adviser if you think that any of the changes may impact you.