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Wellington, March 3, 2017
Finance Minister Steven Joyce and Revenue Minister Judith Collins have released three consultation papers proposing new measures to strengthen New Zealand’s rules for taxing large multinationals.
“Our broad-based low rate tax system continues to perform very well for New Zealand overall. However, it is important that the system keeps evolving to ensure that all companies operating in New Zealand pay their fair share of tax,” Mr Joyce said.
He said that the proposals in these documents are in line with the recommendations of the OECD’s Base Erosion and Profit-Shifting (BEPS) Project which has developed best practice measures for the global response to BEPS.
The Proposals
The consultation documents contain proposals for:
- Tackling concerns about multinationals booking profits from their New Zealand sales offshore, even though these sales are driven by New Zealand- based staff
- Preventing multinationals using interest payments to shift profits offshore, and
- Implementing New Zealand’s entrance into an international convention for aligning our double tax agreements with OECD recommendations.
Ms Collins said that the government is mindful of the New Zealand context.
“Therefore, the proposals address some specific BEPS arrangements that Inland Revenue has observed. We welcome multinationals’ participation in our economy, but we also expect them to pay tax based on their actual levels of economic activity in New Zealand,” she said.
Submission date
Submissions on the consultation document on implementing the international convention are open until April 7, 2017.
Submissions on the other two are open until April 18, 2017.
Ministers will consider final proposals arising from the documents later in the year.
The consultation documents are available at www.taxpolicy.ird.govt.nz.
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Photo Caption:
- Steven Joyce
- Judith Collins
