EY Tax Monthly News Update – Edition 2, 2026

EY Tax Monthly News Update – Edition 2, 2026

Welcome to the latest edition of EY’s tax news. This edition covers key tax developments for February 2026. 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:
  • Returns of capital: Off‑market share cancellations - bright line tests and the Commissioner’s notice requirements and other matters
  • Portfolio investment entity income from land development activities
• Stay on top of new finalised guidance:
  • Interpretation Statement: Income tax – deductibility of repairs and maintenance expenditure
  • Determinations: national standard costs for specified livestock; recent severe weather events; provisional depreciation rate for battery energy storage systems (modular)
  • Technical Decision Summary: opening value of foreign investment fund (FIF) income calculation
  • Other: Product Rulings
• Other updates

Government and other updates

• Investment Boost – early signs of impact
• Change to rate of interest for low-interest employment-related loans
• Economic update
• Other updates

International updates

• United States – including Supreme Court ruling regarding authority to impose tariffs 

EY Global webcasts

• OECD efforts on global mobility matters
• What to expect from global tax policy and controversy in 2026
• BEPS Pillar Two: managing FY24 compliance
• 2026 Japan inbound tax reform webcast

EY insights

• Tax Guides – various tax matters covering over 150 jurisdictions
• US implements global 10% import tariff under Section 122 of the Trade Act of 1974
• OECD releases Pillar One Amount B Pricing FAQs and 2026 version of the Pricing Automation Tool
• Japan | 2026 Tax Reform - highlights for Inbound businesses
• Singapore Budget 2026 | Upcoming incentive refresh in a Pillar Two world
• Why shared intelligence will redefine talent
• How reframing trust allows firms to navigate change and unlock growth
• The Latest on BEPS and Beyond | February 2026 

Current draft consultation items 

New finalised guidance

Inland Revenue guidance items finalised since our last update include:

Other updates

Other Inland Revenue updates include:

• The process for closing a business is being simplified, with a new standard form (IR315A) to request a letter of no objection for removal from the Companies Office register. See Inland Revenue’s website here.
• Several key employer publications have been refreshed – see Inland Revenue’s website here for details.
• Inland Revenue has provided information on the Government’s phased KiwiSaver changes. See Inland Revenue’s website here.
• Information for those impacted by severe weather in Waipā, Ōtorohanga, Rangitīkei and Manawatū districts and Banks Peninsula is available on Inland Revenue’s website here. 

Investment Boost – early signs of impact

Preliminary findings from a December 2025 Inland Revenue survey of over 800 businesses suggest that the Government’s Investment Boost policy, introduced in Budget 2025, is beginning to influence investment behaviour:

• Among firms that invested in assets in 2025 and were reasonably aware of Investment Boost (379 respondents), 40% reported that the policy increased their investment spending over the past 12 months, including 11% reporting a significant increase.
• Looking ahead, 49% of firms planning to invest over the next five years said the policy is positively influencing those plans, with 14% expecting a large increase in investment.
• Over half of respondents indicated they are adjusting investment strategies, including 33% changing the timing of investment.

The survey results also indicate that it will take time for the full impact of Investment Boost to flow through to economic activity, and that a third of respondents had limited awareness of the policy and the implications for their business.

The full survey results are expected to be released this month. For further information, refer to the Minister of Finance’s speech at the 2026 New Zealand Economic Forum here, Beehive release (including a related fact sheet) here, and an Inland Revenue Tax Policy website release here.

Change to rate of interest for low-interest employment-related loans

The rate of interest that applies to low-interest employment-related loans for fringe benefit tax purposes is decreasing again, this time from 6.29% to 5.77%. The new rate applies from the quarter beginning 1 January 2026, and the relevant regulations came into force on 27 February 2026. See the Income Tax (Fringe Benefit Tax, Interest on Loans) Amendment Regulations 2026.

Economic update

Treasury has published the Interim Financial Statements of the Government for the six months ended 31 December 2025. Key figures include:

• Tax revenue of $60 billion, which was $0.1 billion (0.2%) higher than forecast
• Operating balance before gains and losses (excluding ACC) deficit of $5.2 billion, which was $1.6 billion less than the forecast deficit

Refer to the Treasury media release here for more information.

Other updates

Other updates include:

• The Employment Relations Amendment Act 2026 received Royal assent on 20 February 2026. Among other things, the Act aims to clarify contractor vs employee status with a four part ‘gateway test’ to provide businesses and workers with greater clarity from the start of their contracting arrangement. Further information is available in the Beehive release here.The passing of this legislation may be of particular interest following a recent Supreme Court decision which found four individuals to be employees rather than independent contractors.
• Government eInvoicing and prompt payment rules have taken effect. Mandated agencies must send and receive eInvoices and pay 95% of them within 5 business days and other domestic trade invoices within 10 days. Refer to the Ministry of Business, Innovation & Employment release here for further details.
• The Government has released a new Anti‑Money Laundering and Countering Financing of Terrorism (AML/CFT) strategy, aimed at cutting red tape for low‑risk customers and transactions while strengthening enforcement against serious crime, with the Department of Internal Affairs becoming the single supervisor from 1 July 2026. See the Beehive release here. 

United States

Supreme Court ruling

The United States (US) Supreme Court has ruled that the International Emergency Economic Powers Act (IEEPA) does not grant presidents authority to impose tariffs, leaving potential refunds of around US$170b to be determined by lower courts. The White House plans to quickly implement alternative legal tools for imposing tariffs, although these methods involve more defined procedures and may take longer to implement than the broad powers previously asserted under IEEPA.

Companies affected by IEEPA tariffs should monitor developments regarding refund eligibility, maintain comprehensive records of tariff payments and prepare for potential changes in duty rates and procedures as the Administration pivots to alternative authorities. For further details, refer to the EY Global Tax News Alert here.

In New Zealand, Trade and Investment Minister Todd McClay noted that the US Supreme Court ruling could be significant for New Zealand exporters, but uncertainty around US tariff policy is expected to continue. See the Beehive release here.

Last Sale Valuation Act could impact New Zealand exporters

A bill titled the Last Sale Valuation Act has been introduced, proposing to move away from the First Sale for Export method for customs valuation purposes. While at an early stage, the proposal may be relevant for New Zealand exporters to the United States if progressed. For more information please get in touch with your usual EY tax advisor.

• OECD efforts on global mobility matters – register here
• What to expect from global tax policy and controversy in 2026 – available on demand soon here
• BEPS Pillar Two: managing FY24 compliance – watch on demand here
• 2026 Japan inbound tax reform webcast - available on demand soon here

• 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
• US implements global 10% import tariff under Section 122 of the Trade Act of 1974
• OECD releases Pillar One Amount B Pricing FAQs and 2026 version of the Pricing Automation Tool
• Japan | 2026 Tax Reform - highlights for Inbound businesses
• Singapore Budget 2026 | Upcoming incentive refresh in a Pillar Two world
• Why shared intelligence will redefine talent
• How reframing trust allows firms to navigate change and unlock growth
• The Latest on BEPS and Beyond | February 2026

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