NZ Cracks Down on Tax Avoiders

December 8, 2017 Taxation in New Zealand

New Zealand tax rulesWELLINGTON – New Zealand may soon step up against large multinational businesses arranging their affairs to skip paying taxes in the country.

On December 8th the Taxation (Neutralising Base Erosion and Profit Shifting) Bill was introduced into parliament in New Zealand.

The bill will, if approved, help control the occurrence of tax evasion and avoidance committed in New Zealand by multinational companies.

The newly proposed rules are based on similar rules enacted and proposed around the world for combating tax evasion and base erosion.

The key points in the bill revolve around aggressive tax planning and the misuse of intercompany loans, hybrid mismatches, artificial arrangements, and illicit transfer pricing practices.

It is expected that if the new rules are implemented, they will lead to the collection of an extra NZD 200 million in taxes per year.

The first reading of the Bill is expected to take place on December 12th, with two subsequent readings needing to take place before the measures can be enacted.

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