Global Daily Tax News, New Zealand Releases 2025 Budget, (May 29, 2025)

New Zealand announced proposals to change the employee share scheme tax rules and the KiwiSaver scheme in its 2025 Budget.

For employee share schemes, the Government will defer the taxing point for schemes that involve the issue of shares in an unlisted company to a point at which the employee can access cash from the shares to meet their tax liability.

In respect of the KiwiSaver scheme, the Government intends to extend eligibility for the KiwiSaver Government contribution and employer matching to 16- and 17-year-olds. Further, the Government intends to implement the following changes:

• increase the default employee and employer contribution rate from three percent to 3.5 percent from April 1, 2026, and then to four percent from April 1, 2028;

• allow KiwiSaver members to apply to Inland Revenue for a temporary reduction of their contribution rate to three percent;

• remove the Government contribution for all KiwiSaver members with taxable income over NZD180,000 per year; and

• halve the rate of the government contribution to 25 cents per dollar contributed to a maximum of NZD260.72.

The Government has also tabled The Taxation (Budget Measures) Bill (No 2), which will introduce the new partial expensing regime called "Investment Boost", which will provide businesses an immediate tax deduction for new assets equal to 20 percent of the purchase price of the asset.

Finally, the Government has committed additional funding to Inland Revenue to boost the agency's tax compliance and debt management activities.