Tax & Business Newsletter – September 2026

Welcome to our September 2026 newsletter. The Reserve Bank has lifted the Official Cash Rate again, and with the election now less than two months away we give this issue's special column over to the tax policies the major parties are taking to 7 November – including, plainly stated, where we think the better settings lie. Alongside that we work through the tax Bill the Government introduced on 10 September, which rewrites fringe benefit tax on motor vehicles for the first time since 1985 and makes substantial changes to the foreign investment fund rules, non-resident contractors' tax, GST error correction and the R&D Tax Incentive – and we cover the arrival of automatic international reporting on crypto-assets.

Business and Economic Update – OCR Lifts Again to 2.75%

On Wednesday 2 September the Monetary Policy Committee raised the Official Cash Rate by 25 basis points to 2.75%, its second consecutive increase after July's move to 2.50%. The decision was reached by consensus, with no vote required. Annual CPI inflation was 4.1% in the June 2026 quarter, above the Reserve Bank's 1 to 3% target range, driven largely by fuel and related prices linked to the Middle East conflict; excluding vehicle fuels, annual inflation was 2.9% and therefore inside the band. The Committee is setting policy to return inflation to 2% by late 2027 and has signalled the OCR may need to rise further this year.

Retail banks passed the increase through to floating mortgage rates in full, and within days. ANZ and ASB moved their standard floating rates to 6.29%, BNZ to 6.34% effective 17 September, Westpac to 6.39% effective 7 September, and Kiwibank lifted its base variable rate to 6.25% from 21 September. Savers did less well: increases to on-call and savings rates were generally smaller and slower, and the Reserve Bank itself noted in the Monetary Policy Statement that pass-through to term deposit rates has been more limited, which lowers banks' cost of new funding and is not what the Committee considers consistent with the intended transmission of monetary policy.

The Reserve Bank's published OCR track now implies an average of about 2.81% in the December quarter. Market economists read that as consistent with a pause at the 28 October review followed by a further 25-point increase at the final decision of the year on 9 December, although the Committee has been explicit that future moves depend on its judgement of the balance of risks to medium-term inflation.

Action: If you have lending on floating rates, or fixed terms rolling over before March, model your cash flow at a floating rate near 6.3% rather than on last year's numbers – and when renewing a term deposit, compare across providers, because the spread between banks is currently wider than the OCR movement itself.

Special Column – Election 2026: The Tax Choice on 7 November

With the General Election confirmed for Saturday 7 November 2026, voters face the sharpest tax choice put to them in a generation. On one side are parties proposing structural change to the tax base – capital gains tax, wealth tax, inheritance tax, land tax. On the other are parties proposing to leave the base broadly where it is and compete on growth. The table below summarises what has actually been announced. We then set out, plainly, where we come out.

Drawn from Election 2026 party tax policy tracker, updated to 3 September 2026, together with the parties' own announcements. Policies are still being released and amended.

Where We Come Out: National's Settings

The strongest argument for National's tax platform is not the rate on any single tax. It is stability. Every advisory firm in this country has spent the last decade re-papering client structures for changes that were then reversed: interest deductibility phased out, then restored; the bright-line test at two years, then five, then ten, then two again; commercial building depreciation removed, reinstated, and removed. KPMG makes the point in its own election commentary that this churn erodes confidence in the stability of policy and blunts the effect of the very incentives it is meant to deliver. For an owner-managed business deciding whether to commit capital over a seven to ten-year horizon, knowing the rules will hold is worth real money – and it appears in nobody's costing.

A capital gains tax is where that matters most. Labour's design is more contained than versions previously debated: 28% on gains accruing after 1 July 2027, prospective rather than retrospective, with the family home, farms, shares, operating businesses, KiwiSaver and inheritances outside the net. But a valuation-day CGT is still an enormous administrative undertaking, and it lands hardest on people least equipped to carry it. Every commercial building, every rental, every family trust holding property will need a defensible 1 July 2027 value and will need to hold that evidence for decades. The owner-operator who bought their own premises twenty years ago and always intended to sell them to fund retirement sits squarely inside the net, while a person who built identical wealth in a share portfolio sits outside it. That is a legitimate political choice, but it is not a neutral one, and it will distort behaviour.

Further left, the proposals shift from taxing gains to taxing assets. An annual wealth tax, a capital acquisitions tax on gifts and inheritances, and an annual land value tax all fall due whether or not the asset produced any cash that year. A family trust holding a commercial building through a soft tenancy market, a farmer in a poor season, a retired couple whose wealth is the house they live in – each faces a liability with no income behind it. Deferral regimes exist in some of the proposals, but deferral is simply debt against the asset, accruing until the family is forced to sell.

Set against that, National is the only party proposing no new taxes at all, and it has committed to holding that line in any coalition agreement it signs. For clients whose wealth sits in property, in an operating business or in a family trust – which is most of ours – the practical difference between a National-led and a Labour-led government over the next three years is measured in structural change: a valuation exercise across the portfolio, the risk that interest deductibility is unwound again, and the replacement of Investment Boost with a $10,000 instant asset write-off that will not move the needle for anyone buying serious plant. On our reading, the settings National is proposing are the better ones for productive investment in New Zealand, and the case rests as much on predictability as on the tax saved.

The Counter-Arguments, Fairly Put

Clients should weigh the other side of this, and it is not weak. “No new taxes” is not the same as no tax increases: National has not ruled out lifting existing levies, charges or fees, and it has not stated a position on personal rates or thresholds at all. Ruling out revenue does not make costs disappear – an ageing population, health, superannuation and a substantial infrastructure deficit still have to be funded, and Inland Revenue's own 2026 Long-term Insights Briefing frames exactly this fiscal question. Councils counting on a visitor levy have lost an option without gaining a replacement. There is also a serious argument, made by people we respect, that a tax base with no general tax on capital gains is unusually narrow by OECD standards, pushes investment toward property, and leaves wage and salary earners carrying a disproportionate share. And several of Labour's small business measures – an $80,000 GST registration threshold and a 15-day payment requirement on invoices up to $25,000 – would be genuinely useful to our smaller clients.

Finally, none of this survives contact with MMP. Whatever is announced now goes into coalition negotiation afterwards, and the parties differ as much among allies as across the aisle: NZ First would make the lowest bracket tax-free and remains open to an accommodation levy National has ruled out, while ACT would take the top personal rate to 28%. The tax law actually legislated in 2027 will not be any single party's manifesto. Read the policies, form your own view and vote accordingly – but do not restructure on the strength of a press release.

Action: Two things are worth doing before 7 November, whichever way you intend to vote. First, make sure you can evidence the current market value and cost base of every property and significant asset you hold: if a valuation-day capital gains tax ever arrives, contemporaneous evidence is worth far more than a reconstructed estimate. Second, hold off on restructuring driven by election-year announcements until legislation is actually introduced. Talk to us before you move anything.

The New Tax Bill – FBT on Motor Vehicles Rewritten

On 10 September the Minister of Revenue introduced the Taxation (Annual Rates for 2026–27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill, which gives effect to the tax measures confirmed in Budget 2026. It is a substantial Bill, and the motor vehicle fringe benefit tax proposals are the first rewrite of those rules since FBT began in 1985. They would apply to benefits provided from 1 April 2027.

The Bill removes the machinery most businesses find impossible to apply consistently: the “made available” test, 24-hour periods, test periods, and the statutory definition of a work-related vehicle all go. In their place is a schedule of six fixed private-use categories running from 100% down to 0%, based on the private use actually permitted. A vehicle provided mainly as an employment perk, with unrestricted private use, sits at 100%. Inland Revenue's own worked example is a branded ute available to an employee at weekends and during holidays: under current law that attracts FBT for 36 days a quarter, an effective inclusion rate of about 40%, and under the proposed categories it falls to 35%.

Two further changes matter for anyone running a vehicle fleet. First, valuation rates would vary by powertrain for the first time: petrol and diesel vehicles keep the existing 20% annual cost price rate, hybrids and plug-in hybrids drop to 19.6%, and electric vehicles to 17%. The Bill abandons the Budget proposal to lift the standard rate to 22.8%. Second, some of the lower business-use categories would require permanent exterior branding – but vehicles bought, leased or rented before the Bill's introduction are exempt from that requirement, so existing fleet does not need sign-writing, and the Commissioner can waive branding where a business or a role is sensitive.

The FBT definition of a motor vehicle also moves from a 3,500kg to a 6,000kg gross laden weight limit, which brings heavier utes inside the regime. Exceptions apply to certain existing leases and purchases and to non-widely-held farming businesses, rental vehicles used in a hire business are excluded, and emergency vehicles operated by police, fire, ambulance, the Defence Force, civil defence and accredited volunteer organisations would be formally exempt. The practical effect for most of our clients is that the double-cab ute treated as exempt on work-related vehicle grounds will need to be reassessed against the new categories before 1 April 2027.

Action: If you provide vehicles to employees or shareholder-employees, do two things this quarter: identify which of your vehicles have been treated as work-related vehicles and would lose that status, and record the acquisition or lease date of each vehicle, since anything acquired before 10 September 2026 is outside the branding requirement. We can model the cost under both the current rules and the proposed categories.

Crypto-Assets: The Reporting Net Has Closed

New Zealand has adopted the OECD's Crypto-Asset Reporting Framework, and it is now live. From 1 April 2026, New Zealand-based Reporting Crypto-Asset Service Providers – exchanges, brokers, trading platforms and others who exchange or convert crypto-assets on behalf of users as a business – must collect identity, tax residency and transaction information about their users. The first reporting period runs from 1 April 2026 to 31 March 2027, with the first report due to Inland Revenue by 30 June 2027 and registration for a CARF account available in myIR from March 2027. Someone who merely holds a wallet, or trades only on their own account, is not a reporting provider.

The significant point for investors is the exchange of information. Inland Revenue will pass data on non-resident users of New Zealand platforms to their home tax authorities, and will in turn receive information from other participating jurisdictions about New Zealand tax residents earning income through overseas platforms. Crypto activity now has roughly the same visibility to Inland Revenue as an ordinary bank account.

CARF does not change how crypto is taxed – it changes only what Inland Revenue can see. Under current law crypto-assets are property, most disposals give rise to taxable income regardless of whether any fiat currency was received, amounts must be converted to New Zealand dollars at the time of each event, and records must be kept for seven years. The new Bill does make two helpful changes at the margins: a share-lending style cost-base preservation rule for certain decentralised finance crypto-asset lending transfers, aimed at arm's length transfers of a year or less so that a temporary transfer does not trigger an interim tax point, and an exclusion of qualifying fiat-pegged stablecoins (where the peg holds within a 2% variance) from the revenue account rule for personal property acquired for the purpose of disposal. ACT is separately campaigning on exempting gains where a crypto-asset has been held for more than a year, but that is election policy, not law.

Action: If you hold or trade crypto-assets, reconcile your position for the year ending 31 March 2027 now rather than in 2028 – including any activity on offshore platforms. Where past years have not been correctly returned, a voluntary disclosure made before Inland Revenue makes contact carries materially better penalty outcomes. Talk to us in confidence.

The Rest of the Bill – FIF, Contractors, GST, R&D and Charities

Beyond fringe benefit tax, the Bill carries a long list of measures. These are the ones most likely to touch our client base.

Foreign Investment Funds

The FIF regime gets the most generous treatment in the Bill. The de minimis threshold rises from $50,000 to $100,000 of cost price, applying from 1 April 2026, so an investor whose offshore holdings stay under $100,000 is outside the FIF rules altogether. Eligibility for the revenue account method – which taxes 70% of realised gains together with actual dividends received – would be extended from recent migrants to all New Zealand residents holding unlisted foreign shares, and residents who are also taxed elsewhere because of citizenship or work rights would be able to use it for listed shares as well. Balancing that, the revenue account method exit tax would extend to a person who becomes non-resident under a double tax agreement from 1 April 2027, and anyone switching out of the method must stay out for five years before returning. Founders and key employees would be able to keep using the attributable FIF income method where their interest drops below 10% as a business expands, and the cost method would become available for unlisted shares with no readily available market value.

Non-Resident Contractors and Financial Arrangements

The non-resident contractors' tax withholding exemption threshold would lift from $15,000 to $75,000 per contract over a 12-month period, with a single-payer approach applied to both the monetary and 92-day thresholds, and low-risk contractors registered in New Zealand for at least 24 months excluded from NRCT altogether. This is a real reduction in administration for any business engaging offshore specialists.

On the financial arrangements side, the portfolio threshold for using the straight-line method rises from $1,850,000 to $3 million, and an elective regime would let natural persons and complying trusts calculate financial arrangements in a foreign currency, with relief for quarantined foreign financial arrangements where the person is taxed overseas under a double tax agreement.

GST

A new subpart 3A would create a single framework for correcting return errors, supply errors and supply inaccuracies, replacing the patchwork that currently applies. Minor errors within a small-value threshold – the lower of $10,000 or 5% of total supplies, or $1,000 as applicable – could simply be corrected in a later return rather than by amending the original. A new section 20BA would allow an input tax deduction for goods and services acquired before registration, once they begin to be used in a taxable activity. The Bill also confirms that a non-resident supplier working at a client's premises in New Zealand does not establish a fixed or permanent establishment by reason of those premises alone, and zero-rates electricity generated at residential installation control points and supplied to retailers.

Research and Development

An in-year advance payment scheme would let approved taxpayers receive quarterly payments of 15% of estimated eligible expenditure, capped at 80% of the estimated total credit and subject to a labour-related cap, with a year-end reconciliation. That is a genuine cash-flow improvement for companies currently waiting until after year end for the credit. Less welcome: the internal software development expenditure cap falls sharply from $25 million to $3 million per income year, and mineral, petroleum, gas and geothermal prospecting, exploration and drilling would be excluded from qualifying activities. The Commissioner would also gain a discretion to extend filing deadlines or accept late amendments where a failure resulted from genuine mistake or events outside the taxpayer's control.

Not-for-Profits, Charities and Donations

Membership subscriptions and levies would keep their non-taxable treatment. The deduction available to small not-for-profits rises from $1,000 to $10,000, and an organisation with net income of $10,000 or less would not have to file an income tax return at all – a sensible outcome for the many small clubs and societies that currently file to report nothing. Volunteer honoraria could be treated as salary or wages. Donors would be able to claim and receive charitable tax credit refunds during the year instead of waiting until year end. Working the other way, the income tax exemption for foreign charities deriving New Zealand investment income without registering under the Charities Act 2005 would be repealed from 1 April 2028.

Banks and Tax Administration

Thin capitalisation equity thresholds for banking groups would rise to 12% for foreign-owned domestic systemically important banking groups and 11% for others, linked dynamically to the Reserve Bank's countercyclical capital buffer. The Bill would also give Inland Revenue express legislative authority to use automated systems for high-volume, rules-based decisions, subject to a mandatory operational standard reviewed every three years, and would create new statutory categories and integrity rules for digital services providers and bookkeepers.

A caution on all of the above. The Bill is only at introduction stage and will not complete its passage before Parliament rises for the election. Whether it proceeds, and in what form, is a matter for the next Parliament, although the annual rates provisions conventionally need to be enacted before the end of the tax year. Nothing here is law yet.

Action: Two of these are worth acting on early. If your offshore share portfolio sits between $50,000 and $100,000 of cost, the higher FIF de minimis may take you out of the regime from 1 April 2026 – check before you file. And if you engage non-resident contractors, review your withholding position against the proposed $75,000 threshold. We can work through either with you.

Short Technical Notes

• DET 26/06: The fringe benefit tax prescribed rate of interest on employment-related loans is 6.07% for the quarter commencing 1 October 2026 and subsequent quarters.

• Rulings process: From 14 September 2026 the application process for binding rulings and certain determinations has changed. If you are contemplating a ruling application, the requirements are not what they were last month.

• QB 26/05: Whether a personal services company can register for GST where it supplies the services of a director or board member. Relevant to anyone holding directorships through a company.

• TDS 26/12: A private ruling on whether a building and fit-out were trading stock for Investment Boost purposes.

• IS 26/13: Payments by employers on the death of an employee to executors and family: whether amounts are taxable to recipients, deductibility for the employer, PAYE obligations, and the duties of executors to file returns.

• IS 26/12: Working for Families tax credits and family scheme income. Note that the changes made by the Taxation (Budget Measures) Act 2026 do not take effect until 1 April 2027, so the statement reflects the law as it currently applies.

• Consultations closing: PUB00548, on whether an Active Investor Plus visa holder can become tax resident under the permanent place of abode test, closes 13 October 2026; PUB00266, on non-resident software suppliers' payments derived from New Zealand, closes 31 October 2026.

• KiwiSaver, both sides: In mid-September Labour released its own KiwiSaver policy, making employer contributions compulsory from 1 July 2028 and lifting them to at least 6% of pay by 2032, continuing during paid parental leave and past age 65. With National proposing a combined 12% by the same year, employers should plan for materially higher payroll on-costs from 2028 regardless of the result.

Key Tax Dates Snapshot – September 2026 to January 2027

This is a high-level guide only. Always confirm your exact due dates in myIR.

How We Can Help

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

• Modelling how each party's announced tax policies would affect your own structure, before you need to act on any of them

• Establishing and documenting valuation and cost-base evidence across your property and business assets, so that you are ready if the rules change

• Fringe benefit tax reviews, particularly motor vehicles, ahead of the proposed simplification

• Crypto-asset record reconstruction, return preparation and voluntary disclosures under the new reporting environment

• Disputes work: notices of proposed adjustment and notices of response, audits, risk reviews, and negotiating instalment arrangements with Inland Revenue

• Interest rate and cash-flow planning for lending that is refixing over the next two quarters

• Trust, insolvency, and general tax and business advisory support, as always

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

Contact Greenlane CA Limited

• Email: info@glca.co.nz

• Phone: +64 9 522 5182

• Website: www.glca.co.nz

• Address: 97 Great South Road, Greenlane, Auckland 1051

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.

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For advice specific to your situation, please contact Greenlane CA Limited directly.