Aotearoa New Zealand's 2026-27 annual tax bill has been introduced to Parliament, bringing together a wide range of changes across tax administration, fringe benefit tax, foreign investment funds, research and development, GST, KiwiSaver and other areas administered by Inland Revenue.
The Taxation (Annual Rates of 2026-27, FBT Simplification, Foreign Investment Funds, and Remedial Measures) Bill was introduced on 10 September 2026 and passed its first reading on 15 September. It is now before the Finance and Expenditure Committee, which is now calling for submissions.
For DSPs, much of the bill represents ongoing maintenance and modernisation of the tax system rather than major structural change. However, several proposals have potential implications for DSPs and their customers, which are worth understanding as the bill progresses.
Importantly, the bill also progresses reforms to formally recognise DSPs as intermediaries under the Tax Administration Act 1994
following Inland Revenue consultation earlier this year. DSPANZ plans to work with Inland Revenue to understand the full impact of the
proposed change for our members. Members, watch this space and we'll keep you informed.
What's in the bill?
In line with the normal process for New Zealand's annual tax legislation, this bill combines major policy measures with technical and remedial amendments. For DSPs, several areas may be of interest, including:
- Formal recognition of DSPs as intermediaries
- Simplifying fringe benefit tax
- Research and development tax incentive changes
- As well as some other changes to watch for potential impacts
Continue reading for our breakdown. Read the full bill on the NZ legislation website and access Inland Revenue regulatory impact statements on their website.
Formal recognition of DSPs as intermediaries
One of the most directly relevant changes for DSPs is the specific statutory intermediary category for "digital services providers", bringing DSPs into the intermediary framework in Part 7B of the Tax Administration Act 1994.
DSPANZ provided feedback to Inland Revenue on this proposal during a consultation earlier this year. Our submission supported the overall reform while seeking legislation that is proportionate, technology neutral and commercially workable.
While the legislation will establish the framework, some of the most important practical questions will depend on how it is implemented by Inland Revenue.
DSPANZ looks forward to continuing discussions with our members and Inland Revenue on how this change will go live and operate in
practice.
Simplifying fringe benefit tax
The bill contains significant reforms to fringe benefit tax (FBT), particularly the treatment of motor vehicles.
The proposed reforms are intended to simplify existing requirements and reduce compliance costs associated with FBT. Inland Revenue has published separate regulatory analysis supporting the proposed motor vehicle changes.
For payroll, accounting and tax software providers, simplificaiton of the underlying rules should ultimately support simpler administration. However, changes to the rules can still require updates to calculations, data requirements, workflows, reporting and customer guidance.
DSPs providing FBT functionality should therefore consider the detailed proposals and whether they create any practical implementation
issues for their products or customers.
Research and development tax incentive changes
The bill also outlines several changes to the Research and Development Tax Incentive (RDTI), including specific proposals affecting internal software development. Inland Revenue has published separate regulatory impact analysis covering the proposed internal software changes, alongside analysis of in-year RDTI payments and the Commissioner discretionary powers.
These measures may be relevant to DSPs undertaking significant software development activity and should be considered against
individual circumstances.
Other changes to watch
The bill contains other measures that may affect individual DSPs or their customers.
These include changes relating to foreign investment funds, GST, KiwiSaver, withholding tax, not-for-profit taxation, cryptoassets and a range of remedial amendments. Inland Revenue has published detailed bill commentary and supporting regulatory analysis explaining the individual measures.
Not every amendment will require software changes. The practical impact will depend on the products, services and customer groups
supported by individual DSPs.
What happens next?
We're welcoming feedback from members on the bill, particularly where they identify unintended consequences, implementation issues or significant product changes.
DSPANZ will be providing more detailed analysis on the change introducing DSPs as intermediaries and engaging further with members. Keep an eye out for further information from us.
Due to the upcoming General Election, there is no formal closing date for submissions but they are encouraged by 4 November 2026. If you're looking to make your own submission, chek the Parliament website for the latest information.