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EY Tax News Update: Edition 8, 2025
Welcome to the latest edition of EY’s tax news. This edition covers key tax developments for September 2025. You can also find details of upcoming EY Global webcasts, along with links to EY insights.
In brief
Inland Revenue updates
- Don’t miss your chance to have your say on current draft consultation items:
- Taxation (Annual Rates for 2025-26, Compliance Simplification, and Remedial Measures) Bill
- Revised guidance on shortfall penalties
- Income tax implications of providing sponsorship
- Stay on top of new finalised guidance:
- Operational Position: fringe benefit tax (FBT) treatment of open loop cards
- Interpretation Statements: whether an off-market share cancellation is made in lieu of the payment of a dividend; student loans – overseas borrowers and their obligations
- Technical Decision Summary: GST supply of accommodation
- Other: Binding Product Ruling; Determination on spreading method to be used for some electricity price contracts for difference
- Other updates
Government and other updates
- Legislative update – recently enacted legislation
- Other updates
International updates
- Australia
- United States
- OECD
EY Global webcasts
- BEPS 2.0 Pillar Two: how to navigate uncharted tax waters
- How to adjust to a volatile tax environment
EY insights
- Tax Guides – various tax matters covering over 150 jurisdictions
- How taxation of digital services is again a concern for businesses
- What do shifting sustainability regulations mean for business?
- AI needs a control tower before it takes off
- European Commission launches three new CBAM Calls for Evidence
- The Latest on BEPS and Beyond | September 2025
Inland Revenue updates
Current draft consultation items
|
Consultation item type |
Description |
Public consultation closes |
|---|---|---|
|
The Bill passed its first reading on 11 September 2025 and has been referred to the Finance and Expenditure Select Committee, with public submissions due by 23 October 2025. |
23 October 2025 |
|
|
Draft Interpretation Statements PUB00500: Shortfall penalties – s 141A, 141B and 141C of the Tax Administration Act 1994 |
Once finalised, these draft items and related fact sheets will replace existing Interpretation Statements on the shortfall penalties for not taking reasonable care, taking an unacceptable tax position and gross carelessness. The changes primarily reflect legislative amendments and new case law, along with the inclusion of several additional examples. A reading guide contains a summary of main changes. |
31 October 2025 |
|
Draft Interpretation Statement PUB00509: Income tax implications of providing sponsorship |
Considers the income tax implications for a business providing sponsorship to an organisation, event, person or cause, where the taxpayer (sponsor) intends for the sponsorship to promote or advertise their business. The sponsorship may be provided in the form of money, or by providing products or services. |
21 November 2025 |
New finalised guidance
Inland Revenue guidance items finalised since our last update include:
|
Finalised guidance name |
Description |
|---|---|
|
Operational Position OP 25/02: Commissioner’s operational position on the FBT treatment of open loop cards provided by employers to employees |
Outlines the Commissioner’s view regarding employers who have given “open loop” gift cards to their employees and returned them as a fringe benefit since 16 April 2025, contrary to an existing Question We’ve Been Asked (QB 25/07) which takes the view that open loop cards are subject to pay as you earn (PAYE) rather than FBT.
The Taxation (Annual Rates for 2025-26, Compliance Simplification, and Remedial Measures) Bill proposes to allow open loop cards to be treated as a fringe benefit, with retrospective application from 16 April 2025.
In light of the expected law change, the Operational Position notes that the Commissioner will not apply resources to determining whether an employer has applied the position in QB 25/07 correctly for PAYE periods that cover 1 April 2025 - 31 March 2026. This position only applies where the employer has returned FBT on the provision of open loop cards during this period. |
|
Interpretation Statement IS 25/19: Income Tax – Whether an off-market share cancellation is made in lieu of the payment of a dividend |
Considers the application of section CD 22(6) and (7) of the Income Tax Act 2007 in relation to the factors to be taken into account in determining whether an off-market cancellation of shares is made in lieu of the payment of a dividend. |
|
Interpretation Statement IS 25/20: Student Loans – Overseas borrowers and their obligations |
Discusses when a student loan borrower will be a New Zealand-based borrower and when they will be an overseas-based borrower. This status determines whether interest accrues on the loan and impacts repayment obligations. |
|
Technical Decision Summary TDS 25/22: GST – supply of accommodation |
Summarises a decision of the Tax Counsel Office in relation to a private ruling that considered the GST treatment of the provision of accommodation in a building.
Issues included whether the building is a “commercial dwelling” (which would mean the supply of accommodation in the building is not an exempt supply) and whether the applicant is entitled to input tax deductions for all GST charged in respect of the building’s construction and subsequent operation. |
|
Other |
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Other updates
Other Inland Revenue updates include:
- A new “overview” page on Inland Revenue’s Tax Technical website here contains a list of existing Inland Revenue public guidance items relating to the bright-line test.
- Inland Revenue’s Public Remedials Log has been updated to August 2025. The Public Remedials Log seeks to inform the public about remedial legislative issues that Inland Revenue has considered and tracks the progress of each item through the legislative amendment process. It can be found on Inland Revenue’s Tax Policy website here.
Government and other updates
Legislative update
The following legislation has recently been enacted:
- Income Tax (FamilyBoost) Amendment Act 2025 – contains legislation for the previously announced changes to the FamilyBoost scheme. See also Inland Revenue’s Tax Policy website here and the Beehive release here.
- Customs (Levies and Other Matters) Amendment Act 2025 – adjusts revenue collection on imported and exported goods. A related Beehive release is available here.
- Local Government (Water Services) (Repeals and Amendments) Act 2025 – this Act originated from the Local Government (Water Services) Bill, which was split into two Bills late in the Parliamentary process. It contains amendments to other legislation, including the Income Tax Act 2007, Goods and Services Tax Act 1985 and the Tax Administration Act 1994.
- Climate Change Response (Emissions Trading Scheme—Forestry Conversion) Amendment Act 2025 – limits whole-farm conversions to exotic forestry registering in the emissions trading scheme. A related Beehive release is available here.
Other updates
Other updates include:
- Cabinet has agreed to repeal and replace the Holidays Act 2003 with a new Employment Leave Act. Key changes are proposed to include a shift to hours-based accrual for sick and annual leave, and a shift to pro rata sick leave. For more information, refer to the Beehive release here.
- The Government has announced that overseas-based investors with an Active Investor Plus residency visa will be allowed to buy or build one house in New Zealand, provided the minimum value of the house is $5 million. See the Beehive release here for details.
International updates
Australia
Updates from Australia include:
- The Treasury Laws Amendment (Strengthening Financial Systems and Other Measures) Bill 2025 was introduced into the House of Representatives and includes various tax, corporations law and other changes. Key proposed changes include an extension to the small business instant asset write off and changes to the Corporations Act in relation to beneficial ownership disclosure obligations.
- The Australian Tax Office released a Draft Legislative Instrument on Pillar Two tax return lodgement exemptions. The draft instrument proposes to reduce compliance costs for multinational enterprise groups by exempting some entities from filing certain Pillar Two tax returns that would only show nil (zero) liability.
United States
The following EY Global Tax News Alerts are available:
- US Treasury and IRS announce intent to withdraw the disregarded payment loss (DPL) rules, modify the dual consolidated loss (DCL) rules, and extend DCL transitional relief for Pillar Two Taxes
- US Supreme Court will hear oral arguments in tariff case in early November 2025; opening briefs due soon
- US Executive Order modifies scope of certain tariffs and establishes procedures for implementing trade and security agreements
- US-Japan Agreement updated and public comment period open for Section 301 extensions
OECD
From the OECD:
- Tax Policy Reforms 2025: OECD and Selected Partner Economies – see also the related OECD press release Governments increased tax revenues in 2024 to meet rising spending needs
- Revised BEPS Action 5 Transparency Framework on Tax Rulings – see also the EY Global Tax News Alert here
EY Global webcasts
EY insights
Refer to the below guides, thought leadership articles and regular newsletters available on ey.com:
- Tax Guides – browse our in-depth guides covering corporate tax, indirect tax, personal taxes, transfer pricing and other tax matters in more than 150 jurisdictions
- How taxation of digital services is again a concern for businesses
- What do shifting sustainability regulations mean for business?
- AI needs a control tower before it takes off
- European Commission launches three new CBAM Calls for Evidence
- The Latest on BEPS and Beyond | September 2025
Contact us
Dean Madsen | New Zealand Tax Leader
Ernst & Young, New Zealand
Dean.Madsen@nz.ey.com
Paul Dunne | New Zealand Tax Policy Leader
Ernst & Young, New Zealand
Paul.Dunne@nz.ey.com
Aaron Quintal | Partner, Private Client Services
Ernst & Young, New Zealand
Aaron.Quintal@nz.ey.com
Sarah-Jane Leslie | Senior Manager, Tax Policy
Ernst & Young, New Zealand
Sarah-Jane.Leslie@nz.ey.com
Sladja Lines | Senior Manager, Tax Policy
Ernst & Young, New Zealand
Sladjana.Lines@nz.ey.com