New Zealand: Tax measures in 2025 budget
Digital tax services legislation would be abandoned
The 2025 budget, announced on May 22, 2025, introduces various tax proposals, including a new 20% “investment boost” tax deduction for business assets and changes to KiwiSaver settings.
The investment boost tax deduction would apply to acquisitions of new qualifying business assets from May 22, 2025, offering an upfront 20% deduction in addition to tax depreciation. Qualifying assets would include those not previously used in New Zealand and depreciable for tax purposes, with exceptions such as land, residential buildings, and intangible assets. Notably, second-hand assets imported on or after May 22, 2025, and certain land improvement expenditures would be included.
KiwiSaver changes include raising minimum contribution rates for employees and employers to 3.5% from April 1, 2026, and 4% from April 1, 2028, with an option to remain at 3% for up to 12 months. Government contributions would be reduced from July 1, 2025, and individuals earning over NZD180,000 would not receive contributions.
Additional tax policy changes include abandoning the digital services tax legislation, adjustments to interest deductibility restrictions for nonresidents, taxation changes for start-up company share schemes, modifications to foreign investment fund rules, and modernizing fringe benefit tax rules to reduce compliance costs.
Read a May 2025 report prepared by the KPMG member firm in New Zealand