On 22 May 2025, the New Zealand Government introduced a new tax incentive called the Investment Boost. This initiative is designed to encourage businesses to invest in productive assets by allowing them to claim an additional tax deduction of a new asset.
Our latest publication Implications of Investment boost on deferred tax discusses the key accounting impacts and considerations on the tax incentive
What can the incentive be claimed for?
To claim the incentive, the asset must be new or new to New Zealand, available for the business to use on or after 22 May 2025, and depreciable for tax purposes. New commercial buildings are included, even though these buildings are not eligible for ongoing tax depreciation under current tax rules. The Investment Boost does not apply to Fixed Life Intangible Property (such as patents and copyright licenses).
How can KPMG help?
- Advise on or review the required system setup so that they are compliant with the new rules and have the required data points for the relevant calculations on disposal.
- Post-implementation review to ensure the calculations are in line with the new rules.
- If your system is not capable of handling the new calculations, we can assist with the on-going maintenance of your Tax fixed asset register.
- Assist with the preparation or review of deferred tax on assets where the Investment Boost has been claimed.
Why does this matter?
The impact on deferred tax will be recognised for all reporting periods ending after 22 May 2025. Introduction of the Investment Boost Tax Incentive could have a significant impact on deferred tax liabilities recognised by businesses. This is likely to be the case especially for businesses that have acquired or constructed commercial buildings.. But all businesses should invest the time to work out whether, and when, it will be relevant.
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