Unlock the Full Value of Equipment Investment with the Government’s New 20% Tax Incentive
Introduction
In the New Zealand Government’s 2025 Budget, a significant opportunity has emerged for businesses investing in their future.
The newly introduced Investment Boost allows for a 20% upfront depreciation deduction on the cost of eligible new assets.
For companies considering the purchase of equipment such as processing and packaging machinery, this initiative offers a compelling reason to act decisively and strategically.
This article explores the full breadth of incentives now available and how your business can maximise returns on capital equipment investment.
1. The Investment Boost at a Glance
Effective for eligible new assets acquired from 22 May 2025, the Investment Boost allows:
A 20% upfront tax deduction on the asset's purchase price.
Continued normal depreciation on the remaining 80% of the asset’s cost over its useful life.
This provides a powerful cashflow advantage, reducing taxable income in the year of acquisition and improving return on investment.
2. Eligible Asset Categories
The incentive applies to a wide range of productive assets, including:
Vacpack Machinery Categories:
Vacuum packers
Cooking kettles and Cook-Chill systems
Tray sealers
Skin packing systems
Shrink sleeve applicators
Food dicing, slicing, and grating machines
Note: Assets must be new and not previously used in New Zealand.
3. Why This Matters for Business Planning
The ability to claim an upfront deduction supports better financial planning and lowers the cost of capital investments. Here’s how:
Improved Cashflow: Reduces taxable income in the acquisition year, meaning lower tax obligations and better liquidity.
Strategic Growth: Encourages investment in automation, capacity expansion, or operational efficiency upgrades.
Tax Efficiency: Pairs with standard depreciation to deliver sustained tax savings over time.
Long-Term ROI: Enables investment in higher-efficiency equipment that delivers productivity gains and lower operating costs.
4. Use Case Scenarios
Example 1 – Food Producer Upgrading to Cook-Chill Systems
A commercial kitchen invests in a new 300L cooking kettle from Vacpack at NZD $45,000.
Immediate Tax Deduction: $9,000 (20% of $45,000)
Remaining Depreciable Base: $36,000 over asset’s useful life
Example 2 – Meat Processor Installing High-Speed Vacuum Packers
A meat processing plant installs a new double chamber vacuum packer valued at NZD $24,000.
Immediate Tax Deduction: $4,800
Standard depreciation continues on $19,200
In both cases, the upfront deduction boosts short-term financial metrics while retaining long-term efficiency gains.
5. Exclusions and Considerations
The Investment Boost does not apply to:
Second-hand assets already used in NZ
Intangible property (e.g., patents, copyrights)
Trading stock and consumables
Assets under $1,000 (already fully deductible)
6. Planning Ahead with Vacpack
With over 25 years in the industry, Vacpack is ready to help businesses of all sizes navigate this incentive and invest wisely in proven, efficient food production and packaging equipment.
We offer:
Custom quotations tailored to your production needs
Expert advice on system integration and capital planning
Delivery and installation timelines aligned with budget planning
Ongoing support and maintenance packages
Final Thoughts
This government-backed incentive is not just about tax deductions—it’s about helping businesses position themselves for sustainable growth. Whether you're automating a production line, replacing legacy equipment, or expanding into new products, the 20% Investment Boost makes now a smarter time than ever to act.
We welcome the opportunity to revisit your quotes or build a tailored proposal that supports your goals.
Start the Conversation with us Today
📞 +64 9 443 6301
📧 info@vacpack.co.nz
🌐 www.vacpack.co.nz