As is in many jurisdictions around the world, there is keen interest in New Zealand around the BEPS Project. The government's approach to BEPS implementation, however, is less intense.
"The government and Inland Revenue Department (IRD) have generally taken a wait and see approach to the evolving global transfer pricing landscape, choosing to continue with annual areas of transfer pricing focus, whilst the OECD and other jurisdictions have introduced more substantial changes," said Leslie Prescott-Haar of TP Equilibrium.
The IRD has introduced country-by-country reporting (CbCR) requirements however and in the 2016 budget, the government has provided new capital funding for IRD's new tax administration system to help it better enforce multinationals' tax compliance.
CbCR is applicable to New Zealand-headquartered companies with global gross revenues exceeding NZ $1.2 billion ($860 million), for fiscal years commencing on or after January 1 2016. It is expected around 20 local companies will be affected. The automatic exchange of information will begin on a voluntary basis from 2018 and on a mandatory basis from 2019.
Furthermore, Mathew McKay of Bell Gully assumes that New Zealand will be part of the multilateral instrument (MLI) which is likely to impact international investment in New Zealand.
"Among the concerns seen in the submissions on the MLI is a strong sentiment that the detailed MLI text should be made public before it is signed, as well as a preference for the focus to be on 'getting it right' through full consultation, rather than on the current December 31 2016 deadline for signing the MLI. It is unfortunate that wider interest groups in New Zealand have no visibility over its detail, and may not do so until the instrument is signed," said McKay.
PO Box 39010, Wellington Mail Centre, Lower Hutt 5045
Tel: +64 4 978 0779
(As of January 1 2016)
|Corporate income tax rate||28%|
|Capital gains tax rate||0%|
|Branch tax rate||28%|
|Royalties from patents, know-how, etc.||15% (c)|
|Payments to contractors||15%|
|Branch remittance tax||0%|
Net operating losses (years)
Source: EY 2016 Worldwide Corporate Tax Guide