For the year ended 30 June 2025, Inland Revenue had 42% more audits, which identified 123% more discrepancies than the previous year, yielding just over an extra billion dollars in tax revenue. We understand this rate of growth has continued in recent months and it is becoming more a matter of when, not if, your business will be subject to a risk review or audit. 

Budget 2025, which covers the year ended 30 June 2026, included an additional $35 million per annum of government funding for Inland Revenue enforcement activities such as audits. With the government facing fiscal pressures, there is an expectation these additional funds will yield an 8:1 return, and this target has been achieved with funding provided in earlier budgets by governments of both stripes. 

Inland Revenue audit activities and areas of interest 

Inland Revenue audit activities and areas of interest are still technical issues and larger-scale activities such as restructurings and property-related businesses, with key areas including transfer pricing, tax governance, employee share schemes, corporate restructures, shareholder salary mismatches and matching trust distributions with the income tax returns of beneficiaries.

We have considered these areas high risk for a long time, but while the spotlight is currently on them, remember that any business or activity could suddenly come onto the radar. You are more likely to come under scrutiny than ever before. 

With increased data sharing and access to tools such as machine learning, it is becoming increasingly easy for Inland Revenue to identify apparent discrepancies and ask questions – and in the process, identify necessary corrections. 

Short process rulings and binding rulings

If you’re unsure about compliance regarding any of your tax structures or activities, short process rulings and binding rulings are available. These are a cost-effective way to clarify and lock in Inland Revenue’s position around specific circumstances and Baker Tilly Staples Rodway has provided peace of mind to many clients by obtaining them. 

If you have any concerns in this area or are subject to an Inland Revenue risk review or audit, your Baker Tilly Staples Rodway advisor will be able to help guide you through the process and ensure appropriate action is taken. 

CCH Learning webinar – Corporate Tax Update 

Baker Tilly Staples Rodway Auckland tax director Andrew Dickeson and Inland Revenue Significant Enterprise Technical Specialist Shane Paterson will be hosting a Corporate Tax Update: Navigating Inland Revenue’s Latest Pronouncements 2025 webinar with CCH Learning on Tuesday, 21 October, where they will discuss these issues further and answer your burning questions.