BEPS Fallout To Be Minimal For New Zealand
New Zealand’s tax system is unlikely to experience significant changes resulting from the Organization for Economic Cooperation and Development’s base erosion and profit shifting work, according to professional services firm PwC. The Organization for Economic Cooperation and Development (OECD) set out its first batch of recommendations to tackle BEPS on September 16, 2014. According to the OECD, the program aims to provide governments with clear international solutions for fighting corporate tax-planning strategies that exploit gaps and loopholes in the current system. PwC New Zealand Tax and Private Business Leader Geof Nightingale said: “The BEPS project marks the most significant change to international tax in modern times. This announcement will have a big impact on global companies, whether through greater compliance demands or impacting how they are structured.”
However, he said: “The impact on businesses will depend partly on how the rules are implemented by tax authorities across the world. With New Zealand’s robust international tax and transfer pricing rules in place, we’re already well positioned to address BEPS concerns. We do not anticipate any wholesale changes to New Zealand’s tax system in response to the BEPS project and it is also unlikely that New Zealand will take any unilateral action in response to the BEPS concerns.”
He advised New Zealand-based multinationals to prepare for greater scrutiny from global tax authorities by ensuring that they have access to adequate systems information and documentation to respond to information requests in future.
“The OECD’s recommendations on country-by-country reporting won’t come as a surprise to global companies,” he said. “The big worry for businesses is that different tax authorities will require different information, which could add to the administrative and cost burden for businesses. Efforts to coordinate how tax authorities respond will be challenging but crucial.”
He concluded: “While the importance of [the release of the seven reports] should not be underestimated, the success of the BEPS project will depend on cooperation between governments and tax authorities across the globe. The next part of the BEPS project is likely to be more controversial, with different tax authorities likely to have different views on what’s acceptable and what’s not.”
Source: taxnews- BEPS Fallout To Be Minimal For New Zealand
