• Service: Tax, Global Transfer Pricing Services
  • Type: Business and industry issue, Survey report
  • Date: 7/18/2013

Tax authority views: New Zealand 

New Zealand
How are tax authorities conducting APAs? What are they concerned with? These exclusive interviews can help taxpayers simplify the process.

We have gathered feedback from the tax authorities of various key countries to find out the specifics about their APA programs. Read the following Q&A interview on the topic of APAs in New Zealand with Sanjiv Weerasinghe, Investigations and Advice Manager – Specialist Advice, Inland Revenue.

Benefits of APAs

  • Provides certainty for the taxpayer and Inland Revenue regarding the acceptability of the pricing of the covered intercompany transactions.
  • Offers a cooperative framework for Inland Revenue to better understand a taxpayer’s business (outside of the disputes resolution process).
  • Continuity of Inland Revenue’s resources, such that taxpayers are not faced with frequent changes in the tax authority personnel.

Challenges of APAs

  • Promoting APAs as a mechanism for ensuring certainty, in respect of both taxpayers and the Inland Revenue internally.
  • Resource constraints on the part of Inland Revenue (currently Inland Revenue has four principal advisors who focus on transfer pricing and APAs).
  • Delivering the results desired by taxpayers (e.g., timely turnaround of bilateral APAs, etc.).

Substantive Issues

  • Financing transactions: The level of technical sophistication varies between Inland Revenue, the taxpayer and their tax agents, and the counterparty tax authority. In some instances, there is an element of Inland Revenue educating another party.
  • Intangibles: Always a challenging area, although especially so in the case of “imaginary” intangibles.

Procedural Issues

  • Frequent changes in the personnel of the counterparty tax authority which are involved in the APA.
  • A few instances where taxpayers have provided information to the counterparty tax authority but have not provided it to Inland Revenue.

Best Practices

  • Early engagement of Inland Revenue to ensure that APA application is appropriately scoped.
  • Ensuring that all relevant information is provided to all relevant tax authorities (and irrelevant information is not provided).
  • Consistency between the documentation provided to the tax authority and the actual transactions of the taxpayer.


  • Predominantly more unilateral APAs than bilateral APAs.
  • Types of Transactions

    • All.

    Most Common Methodologies

    • All, the appropriate methodology is fact specific.

    Deviations from Proposed Methodologies

    • Rare.


    • Wide ranging.

    Expectations for the Future

    • Increase in demand from taxpayers for APAs.


    • Current Inland Revenue team who assist with APAs are viewed as being capable and efficient.
    • No current plans to increase resources however in the event of a significant increase in APA applications this would be reconsidered.

    Triangular Issues

    • N/A.


    • No arbitration cases to date in New Zealand.
    • Inland Revenue is open to the inclusion of arbitration clauses in double tax treaties. Currently New Zealand’s double tax treaties with Australia and Japan include arbitration clauses.

    Share this

    Share this