Tax Updates: 22nd June 2026

Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion on any national or international tax issues, please contact Richard via email at [email protected].

Budget 2026

In case you haven’t noticed, AWIR went AWOL for a few weeks: with the long weekend for the King’s Birthday, and then my own absence from the country to attend a meeting with accountants and lawyers from different locations across the globe (oh what fun I can hear you say!).

A lot has happened since my last AWIR edition, most notably Budget 2026. Just in case you missed it, I’ve summarised the key taxation points below:

Charities and not-for-profits

• Donation Tax Credit Cap: From 1 April 2027, donations eligible for the credit will be capped at the lower of $100,000 or the donor’s taxable income. (It will be interesting to see the size of the impact of this change on the charities sector).
• Membership Subscriptions and Levies received by taxable not-for-profits will remain non-taxable from 1 April 2027
• The tax-free income threshold for not-for-profits will rise from $1,000 to $10,000, from the 2027-28 income year. (It’s about time the threshold was changed, in my humble view.)
• Additional changes will take effect from 1 April 2028, including:
  • more flexible donation tax credit refunds (Allowing refunds throughout the year in certain circumstances, rather than a donor having to wait until the end of the tax year),
  • allowing donors to gift their donation tax credit to a charity,
  • simplifying tax treatment of honoraria (may be treated as salary/wages instead of schedular payments),
  • removing the income tax exemption for NZ-sourced non-business income of non-resident charities.
  • From the 2028-29 income year, trusts allocating income to tax-exempt beneficiaries will need to actually pay that income in money within a set period, or it will be taxed at the trustee rate.

International and cross-border tax

• Foreign Investment Fund (FIF) changes
  • All New Zealand residents will be able to use the revenue account method (RAM) for unlisted foreign shares, meaning tax is paid on realised gains and actual dividends rather than broader FIF calculations. The extended RAM (listed & unlisted shares) will also be available to any New Zealand resident who faces concurrent taxation in another jurisdiction (due to citizenship or a right to work there). 
  • The FIF de minimus threshold will increase from $50,000 to $100,000.
  • These changes apply from 1 April 2026 for the 2026-27 tax year.
• Financial Arrangements Rules for Migrants
  • The proposed changes aim to reduce the impact of foreign exchange movements on foreign currency investments and increase certainty.
  • Generally, it applies from 1 April 2027, with some Active Investor Plus changes backdating to 1 April 2025.
• Non-Resident Contractors’ Tax (NRCT) modernisation
  • A broader reform of NRCT is proposed to reduce compliance costs and tax barriers for businesses using offshore contractors. For example, increasing the current monetary exemption threshold from $15k to $75k, and the implementation of a “single-payer” view (where the paying entity only needs to focus on what they are paying in the requisite 12-month period, and not what the non-resident contractor may have also received during the period from other 3^rd-party NZ payers).
  • It applies from 1 April 2027.

Business and Shareholder Tax

• Company loans to shareholders
  • Outstanding shareholder loans will be treated as taxable income to the shareholder six months after a company is removed from the register.
  • This applies to companies removed on or after 4 December 2025.
• Research and Development Tax Incentive (RDTI)
  • The Government has proposed changes to improve the targeting and operation of the RDTI.
  • Most of these changes apply from the 2027-28 income year.
• Fringe Benefit Tax (FBT) on motor vehicles
  • A new category approach is proposed, replacing day-counting for private use.
  • Employers would choose a vehicle-use category and apply the corresponding FBT rate.
  • This applies for benefits provided after 1 April 2027.

This article was originally published through the ‘A Week In Review’ newsletter. If you would like to receive Richard’s tax updates every Monday morning, you can subscribe here.