It is interesting to observe the Inland Revenue Department’s policy programme, which is currently focussing on three key areas:
1. Business transformation;
2. BEPS and international tax reform; and
3. further improvements and enhancements to tax and social policy within the broad-base, low rate (BBLR) policy framework.
Whilst the first and third areas are focussed on the more vanilla aspects of New Zealand taxation, elements of the second area – BEPS and international tax reform – make for an interesting read:
- Negotiation of double tax agreements; new agreements and renewals of existing agreements.
- Mutual recognition of trans-Tasman imputation credits.
- Consideration of the OECD’s recommendations in the BEPS Action Plan with respect to hybrid mismatch arrangements.
- Addressing issues related to non-resident withholding tax on related-party debt.
- Consideration of the OECD’s recommendations in the BEPS Action Plan with respect to interest limitation rules.
- New Zealand implementation of the new global standard for the automatic exchange of financial bank account information with tax treaty partners.
- New Zealand Goods and Services Tax (GST) on purchases of offshore services and intangibles, including digital downloads.
- Companies which become treaty non-resident and tax avoidance opportunities.
- Anti-avoidance and tax treaties.
Whilst New Zealand is in an assessment period with respect to the OECD’s BEPS Action Plan, the country is also making contributions to the OECD regarding cross-border consumption tax-related issues, in New Zealand’s case, GST.