TAX & BUSINESS NEWSLETTER

FEBRUARY 2026

Welcome to our February 2026 newsletter!

This edition covers key developments from January 2026 through to mid-February 2026, including economic updates, critical tax changes, AML/CFT reforms, important compliance deadlines, and news from our firm.

BUSINESS AND ECONOMIC UPDATE

New Zealand's economy is on firmer footing as 2026 gets underway. Westpac's economic overview notes rising confidence, solid export performance and lower short-term interest rates. The BNZ-BusinessNZ Performance of Manufacturing Index remained in expansion territory in January at 55.2, with all five sub-indices showing growth.

However, equity markets remain choppy, and the Treasury Secretary has warned about New Zealand's growing indebtedness to foreign investors. The February half-year reporting season is expected to show revenue and margin improvements after several years of restructuring.

Action: Focus on digital investment, review cybersecurity, and refresh business plans and cash-flow forecasts.

CRITICAL TAX UPDATES

Use of Money Interest (UOMI) Rate Change – from 16 Jan 2026

Inland Revenue has reduced UOMI rates from 16 January 2026:

• Underpayment rate: 8.97% (down from 9.89%)

• Overpayment rate: 2.25% (down from 3.27%)

Although rates have fallen, late payments still accumulate interest at nearly 9% plus penalties. Review your provisional tax positions and consider tax pooling where appropriate.

Personal Income Tax Rates – Fully in force for 2025–26

Action required: Ensure payroll systems are updated to reflect current brackets, especially for employees near threshold amounts.

Budget 2025 – "Investment Boost" Depreciation

Budget 2025 introduced an optional 20% accelerated depreciation deduction on qualifying new assets in the year of acquisition, including commercial/industrial buildings and land improvements (excluding residential buildings and intangibles).

Example: A $500,000 plant purchase could claim an additional $100,000 depreciation deduction in year one, providing significant cash-flow benefits.

TAXATION OF NON-RESIDENT EMPLOYEES

Remote and cross-border work has increased the number of non-resident employees performing services in New Zealand. The key rule is that employment income is taxable in New Zealand when the services are physically performed here, regardless of who pays the salary or where it is paid from.

Double tax agreements may provide a 183-day exemption, but only if the employee is in NZ for not more than 183 days in any 12-month period, the employer is not NZ-resident, and the remuneration is not borne by a NZ permanent establishment; if any condition fails, NZ can tax the income. Non-resident employers may have PAYE obligations where they have a sufficient presence in NZ, and they should also consider permanent establishment and tax-residency risks, especially where senior people work from NZ.

Action required: If you have non-resident staff working in or from New Zealand, please talk to us before assumptions are made about tax and PAYE treatment.

INCORPORATED SOCIETIES – RE-REGISTRATION BY 5 APRIL 2026

All existing incorporated societies must reregister under the Incorporated Societies Act 2022 by 5 April 2026 or they will be removed from the register and lose separate legal personality and limited liability. Failure to reregister means the group can no longer use "Incorporated" in its name and members and officers may effectively be acting in their personal capacities.

To reregister, societies need a compliant new constitution, at least 10 members, up-to-date officer and contact-person details, and an online application through the Companies Office using RealMe. Committees should review their existing rules, prepare a new constitution, obtain member approval at an AGM or special meeting, and complete the online process well before the deadline.

How we can help: We can review your rules, prepare a compliant constitution and guide you through the reregistration steps.

OVERSEAS INVESTMENT REFORMS – 6 MARCH 2026

The Overseas Investment (National Interest Test and Other Matters) Amendment Act 2025 comes into effect on 6 March 2026. Key changes include:

• Simplified testing: Consolidates national interest and investor tests into a single test for all assets except farmland, fishing quota, and residential land

• Active Investor Plus visa holders: Can now apply for consent to buy or build houses worth more than $5 million

• Purpose statement update: Explicitly acknowledges the role of overseas investment in increasing economic opportunity

The Active Investor Plus visa programme is bringing $3.39 billion into New Zealand, with 573 applications generating $1.05 billion invested and $2.34 billion in process. Recent related reforms include the establishment of Invest New Zealand (June 2025), streamlined rules for build-to-rent developments (February 2025), and increased UAE investment thresholds from $100m to $200m (August 2025).

Action required: Businesses involved in transactions with overseas investors or considering selling to foreign buyers should review whether the new streamlined tests apply to their circumstances.

AML/CFT NATIONAL STRATEGY 2026-2030

On 13 February 2026, the Government launched the new AML/CFT National Strategy 2026–2030, taking effect from 1 July 2026, signalling risk-based, intelligence-led supervision and stronger enforcement with higher penalties and explicit power to refer non-compliance to licensing bodies.

Already in force: Reporting entities must risk-rate all new customers from 1 June 2025, with extended coverage to online marketplaces.

Action required: Review your AML programme, especially customer risk-rating, ongoing due diligence, governance and training.

INSOLVENCY TREND – RISING LIQUIDATIONS

Recent data show that formal insolvency activity remains elevated, with signs that the pressure on stressed businesses is still working through the system. Companies Office statistics for January 2026 record 104 companies placed into liquidation, receivership or voluntary administration in that month alone, including 97 liquidations. Independent insolvency analysis indicates that 2025 recorded about 3,163 corporate insolvency appointments, a new high for recent years and above the 3,000 level seen in 2011, and that January 2026 started "with a hiss and a roar" with 114 appointments in what is usually a quieter month. Sector-wise, construction and consumer-facing industries such as food and beverage and retail remain over-represented in recent insolvency reports.

Enforcement activity by Inland Revenue has been a significant driver: in the year to November 2025, IRD moved to liquidate nearly 900 businesses with tax owing and filed 167 winding-up applications in November alone, the highest monthly figure in six years, and commentators do not expect any let-up through at least mid-2026. For directors, this means there is now much less tolerance of prolonged tax arrears or "wait and see" approaches, particularly where Covid-era loans and other IRD debts are involved. If you are finding it difficult to pay taxes on time, are juggling creditor demands, or are concerned about your business' solvency, please contact us early. We have specialist skills in cash-flow forecasting, negotiations with IRD and other creditors, and restructuring options, and early advice can significantly increase the range of workable solutions.

NEWS FROM OUR FIRM: MONITOR YOUR myIR ACCOUNT

We recently wrote to all clients emphasizing the importance of regularly monitoring myIR accounts. The ultimate responsibility for monitoring your tax position rests with you as the taxpayer.

Your Responsibilities

• Log into myIR regularly (especially before payment dates)

• Review all tax types: Income Tax, GST, PAYE, FBT

• Check for outstanding balances, upcoming instalments, penalties and UOMI

• Review IRD notices and correspondence

Important Changes

We will no longer forward IRD letters or notices emailed to us. All IRD correspondence is available directly through myIR. Emails may be diverted to spam folders, making direct myIR access essential.

Our reminder notices are a courtesy only and do not replace your obligation to confirm balances before paying.

Penalties and Remission

IRD is currently strict about remitting penalties and interest. Requests are often declined unless statutory criteria are clearly met. Not receiving or failing to review correspondence is generally not accepted as a valid ground for remission.

Need help? If you have difficulty accessing myIR, contact our office and we will assist you.

KEY TAX DATES SNAPSHOT 2025-2026

This is a high-level guide assuming 31 March balance date. Always check myIR for your exact dates.

Income Tax – 2026 Year

• 7 July 2026: Standard filing deadline (no extension)

• 31 March 2027: Extended deadline (with tax agent extension)

• 7 February 2027: Terminal tax due (standard deadline)

• 7 April 2027: Terminal tax due (with extension)

Provisional Tax (standard method, 31 March balance date)

• 28 August 2025: First instalment

• 15 January 2026: Second instalment

• 7 May 2026: Third instalment

GST (Two-monthly filers, 31 March balance date)

FBT

• Quarterly: 20th of month following quarter end

• Annual: 31 May (for 31 March year end)

CONTACT US

Should you have questions about any matters covered in this newsletter, or need assistance with:

• Non-resident employee tax compliance

• Incorporated societies reregistration

• Overseas investment transactions and consent applications

• AML/CFT programme review

• Tax planning and compliance

• myIR access issues

• Financial difficulty, solvency concerns or IRD debt management

We are here to help you navigate the changing tax and business environment.

Contact Greenlane CA Limited Today

Email: info@glca.co.nz
Phone: +64-09-522-5182
Website: www.glca.co.nz
Address: 97 Great South Road, Epsom, Auckland

Disclaimer

This newsletter is published by Greenlane CA Limited for informational purposes only. The content provided herein is of a general nature and does not constitute professional tax, accounting, legal, or financial advice. While every effort has been made to ensure the accuracy and completeness of the information contained in this newsletter, Greenlane CA Limited makes no representations or warranties, express or implied, as to the accuracy, reliability, completeness, or currency of the information.

Readers should not act or refrain from acting based solely on the information in this newsletter without first seeking professional advice tailored to their specific circumstances. Tax laws and regulations are subject to change, and the application of these laws depends on the particular facts and circumstances of each case.

Greenlane CA Limited, its directors, employees, and agents accept no responsibility or liability for any loss, damage, cost, or expense (whether direct, indirect, consequential, or otherwise) incurred by any person as a result of relying on the information contained in this newsletter, or any errors or omissions therein, howsoever caused.