Businesses across New Zealand are set to benefit from a recently introduced tax initiative designed to support asset investment and economic growth. Starting from 22 May 2025, enterprises acquiring new commercial assets—or completing construction of such assets can take advantage of a 20% tax deduction under the “Investment Boost” policy.
How the 20% Tax Deduction Works
This tax relief allows eligible businesses to apply the deduction in the same income year the asset is purchased or construction is finalized. The benefit functions in a similar way to traditional depreciation but offers a one-time additional allowance on qualifying assets that are either brand-new or newly brought into New Zealand.
How to Claim the Investment Boost Deduction
To apply the deduction, businesses will need to record it in their annual income tax return. The 20% allowance is treated like depreciation and should be noted in financial reporting documents such as the IR10 Financial Statements Summary or in full financial statements, depending on what the business submits.
For instance, if a company purchases an asset worth $10,000 after the effective date, a $2,000 deduction representing 20% can be included as depreciation in the relevant section of the IR10 form.
Why the Investment Boost Matters for Business Growth
This initiative is part of broader efforts to stimulate business investment and productivity by offering upfront support for capital expansion. Business owners are encouraged to keep clear records of qualifying purchases and consult their tax advisors to ensure correct application.
For full details and official updates, businesses should refer to New Zealand’s Inland Revenue website.
News Source: www.ird.govt.nz
