Taxmail discusses the latest developments in the OECD’s multinational BEPS project. At a recent meeting in Australia, Finance Ministers from the G20 countries reiterated their commitment to an effective, practical and sustainable global response to BEPS concerns and, importantly, affirmed the principle that multinationals’ profits should be taxed where the economic activities giving rise to the profits are preformed. This has created some concern whether this could mean New Zealand multinationals paying tax overseas, rather than in New Zealand.
The OECD believes there is unstoppable political momentum for reform of the international tax rules. New Zealand businesses need be aware of the potential BEPS risks for their business and plan accordingly. In New Zealand, for example, we are seeing Inland Revenue focusing on a number of issues that have also caused BEPS concerns (such as cross-border financing and transfer pricing risks).
The G20 has also given its support to an OECD common reporting standard for tax information sharing and exchange between countries. New Zealand is currently introducing a legislative framework to support such information sharing agreements. This latest development suggests that information sharing will be the new norm. Individuals and businesses will need to adapt accordingly.
Foreign superannuation tax changes become law
New rules for foreign superannuation apply from 1 April. This will be a key date for those who have made foreign superannuation withdrawals without paying tax, or who are considering their options (i.e. whether or not to transfer funds to New Zealand). Transfers, including applications to transfer funds, before 1 April can access a 15 percent option which may be beneficial. We therefore strongly recommend you talk to your regular KPMG advisor if you will be affected by the foreign superannuation tax changes.