This interpretation statement discusses when a student loan borrower will be a New Zealand-based borrower and when they will be an overseas-based borrower. A borrower’s status as New Zealand-based or overseas-based will determine whether interest accrues on their loan and will impact their repayment obligations.

This interpretation statement considers the application of s CD 22(6) and (7) of the Income Tax Act 2007 in relation to the factors to be taken into account in determining whether an off-market cancellation of shares is made in lieu of the payment of a dividend.

The item updates and replaces IS2966.

On 16 April 2025, the Commissioner issued Questions we've been asked (QWBA) QB 25/07 What is the income tax treatment of gift cards and products provided as trade rebates or promotions?

This QWBA states the Commissioner's view of the correct tax treatment for when an employer provides an open loop card (as defined in the QWBA) to an employee. The employer should gross up the face value of the open loop card given to an employee and return PAYE on that amount. During consultation for the QWBA, the Commissioner learned that employers often treated open loop cards as a fringe benefit and returned them for fringe benefit tax (FBT). As a result, the QWBA advised that the following decision had been made regarding the past treatment of open loop cards:

Past treatment of open loop cards

[76.]   The Commissioner acknowledges that some employers have been incorrectly treating open loop cards provided to employees as fringe benefits (and subject to the FBT rules) and not the payment of money (and PAYE income payments). The Commissioner will not apply resources to correct previous tax positions taken in return periods ending on or before the date of this statement where an employer has incorrectly treated the provision of an open loop card to an employee as a fringe benefit and returned FBT on that basis.

Since the release of the QWBA, Parliament has proposed amendments to the law to allow open loop cards to be treated as a fringe benefit. This amendment is part of the Taxation (Annual Rates for 2025–26, Compliance Simplification, and Remedial Measures) Bill (199-1) that will be enacted before 31 March 2026. The amendment will be retrospective.

The Commissioner recognises that immediate implementation of the position outlined in the QWBA would be difficult for employers for tax positions taken after the date of issue of the QWBA and before amendment of the law. This is due to required changes to, for example, computer systems, payroll systems and accounting records. The Commissioner also notes that such changes would only be required for a short time given the amendment’s retrospective effect.

Therefore, the Commissioner will also not apply resources to determining whether an employer taxpayer has applied the position outlined in the QWBA correctly for the PAYE periods that cover 1 April 2025 to 31 March 2026.  This position only applies where the employer has returned fringe benefit tax on the provision of open loop cards during this period.

This item summarises a private ruling that considered the GST treatment of the provision of accommodation in a building.

When you sell a residential property within the 2-year bright-line period, any profit will be taxable unless an exclusion or rollover relief applies.

Determinations

• FDR 2025/05: Determination the fair dividend rate method may not be used to calculate FIF income by investors in the iShares Global Aggregate Bond ESG SRI UCITS ETF – EUR hedged (Accumulating) share class

Interpretation statement

• IS 25/18: Income tax – Whether money or property received by New Zealand tax residents from overseas is income from a foreign trust

Questions we've been asked

• QB 25/18: Does GST apply to a deposit the seller retains in a cancelled land sale agreement?
• QB 25/19: GST listed services rules: When is a supply of listed services made through an electronic marketplace?
• QB 25/20: GST listed services rules: How do the rules apply when there is a supply of listed services and other goods or services?

Technical decision summaries

• TDS 25/17: Application of schedular payment rules 
• TDS 25/18: Sale of intellectual property, shares and ongoing provision of services
• TDS 25/19: Company restructure for commercial and estate planning
• TDS 25/20: Transfer of property between charitable trusts

 

This item summarises an adjudication about whether a GST registered person was liable for output tax on disposal of property and whether they were liable for a shortfall penalty.

This item is an update of GA 21/01 which was prepared specifically in relation to the fees paid to a member of a board, committee, panel, review group or task force under the Cabinet Fees Framework published by the Cabinet Office.

How taxation applies to any fees paid to members depends on the personal circumstances of the individual member and the terms of their contract/appointment.

This item summarises a private ruling about whether the market value of properties and chattels transferred between charitable trusts is taxable when the transferors deregister as charitable entities.

Tax Information Bulletin - Vol 37 No 8, September 2025

This interpretation statement considers the income tax treatment of amounts of money or property that New Zealand tax residents receive from a person overseas, including through inheritance. It addresses how to determine whether the person who transfers the money or property is a trustee of a trust and when the resident taxpayer has derived beneficiary income or a taxable distribution from a foreign trust.

Tax Information Bulletin - Vol 37 No 8, September 2025