New Zealand Herald, Auckland 14 Dec 2017
The Inland Revenue Department will get tougher powers to demand overseas information from uncooperative multinational companies under a new law aimed at discouraging complicated tax structures to unfairly minimise a firm’s tax obligation.
The Taxation (Neutralising Base Erosion and Profit Shifting) Bill passed its first reading in Parliament yesterday after a false start when Revenue Minister Stuart Nash missed his cue to deliver the Government’s speech to the legislation.
The new law would adopt a number of measures developed to stifle the ability of large global firms to use base erosion and profit shifting (BEPS) strategies to reduce their tax bill.
It is part of a global push being championed by the Organisation for Economic Cooperation and Development.
The OECD has estimated global losses through tax avoidance amount to US$240 billion a year.
The legislation would also give IRD greater teeth in demanding information from multinational firms held overseas, which commentary on the bill says is “difficult or impossible for Inland Revenue to obtain” and “can allow a multinational to stymie an Inland Revenue investigation through non-cooperation, particularly through withholding the information required by Inland Revenue to perform the investigation”.
Under the proposed law, multinational firms would face fines of up to $100,000 for failing to comply with a request for information, compared to existing sanctions of just $4000 for not providing information or up to $25,000 for knowingly not providing it. – BusinessDesk