We’re still buzzing from the new Budget announcement, and here at Sidekick, we’re all about breaking down what it means for you – our incredible clients, who are out there building and growing New Zealand’s future.

The Government’s message is clear: they want to fuel productivity and economic growth. And frankly, we’re here for it! While the big corporate tax rate cut wasn’t on the cards (let’s be real, that’s a massive undertaking), they’ve served up some seriously business-friendly initiatives designed to get capital flowing and innovation thriving.

The headline act? The Investment Boost tax incentive. We’ve been advocating for something like this, and we’re genuinely stoked to see the Government introducing an upfront 20% deduction for new business assets. This isn’t just a tweak; it’s a significant commitment to helping you invest in the tools, tech, and infrastructure that will drive your business forward.

Imagine this: you buy a new piece of equipment, and in the year of purchase, you can deduct 20% of its cost immediately, on top of your normal depreciation on the remaining 80%. That’s a powerful incentive to make those strategic investments now. And the best part? It applies to a broad range of assets, from machinery and vehicles to industrial buildings (yes, even those!). It’s designed to get you investing in your future, today.

But wait, there’s more! Here’s a quick rundown of other key tax changes we’re excited about:

  • Targeted thin capitalisation modifications for infrastructure investments: This is about making it easier for large-scale infrastructure projects to secure funding, which ultimately benefits us all through better roads, broadband, and more.
  • Deferral of taxation of employee share schemes for startups and unlisted companies: This is fantastic news for our innovative startups! It means employees can defer paying tax on their share options until a “liquidity event” – when they actually have the funds to pay. This removes a major hurdle for attracting top talent.
  • Simplified FIF rules to retain/attract foreign migrants to New Zealand: New Zealand’s unique foreign investment fund (FIF) rules have been a bit of a headache for attracting skilled migrants. These changes aim to make it smoother, allowing more flexibility for individuals with unlisted foreign shares.
  • Relaxation of PIE rules to increase investment in private assets: This could unlock more domestic capital for investing in New Zealand businesses and infrastructure through KiwiSaver funds. Win-win!
  • Simplification of FBT: While we didn’t get the full FBT overhaul we might have dreamed of, there are some sensible changes on the way for motor vehicle benefits and other “unclassified” benefits. This should make compliance a little less of a headache for everyone.

What does this all mean for you, our Sidekick?

We see this Budget as a clear signal of support for businesses investing in growth. The Investment Boost, in particular, presents a real opportunity to bring forward those capital expenditure plans you might have been holding off on.

Of course, the devil is always in the details, and we’ll be keeping a close eye on the legislation as it unfolds. But for now, we’re optimistic. This Budget aims to create an environment where you can truly thrive.

Ready to explore how these changes can benefit your business? Don’t hesitate to get in touch with your Sidekick team. We’re here to help you navigate these updates and make the most of every opportunity. Let’s grow together!