The recently introduced BEPS Tax Bill has been submitted to the Parliament for its first reading. Alongside the Tax Bill, the country has also launched other measures to deal with taxation of multinationals, including transfer pricing audit on specific group of companies.
The Revenue Inland Department (IRD) launched a regulatory impact state this July, announcing that the tax authority had been “aware of about 16 cases of transfer pricing and permanent establishment avoidance currently under audit that collectively involve about $100 million per year of disputed tax.” According to IRD, the transfer pricing measure is to be applied to multinationals with a global annual revenue of over 750 million euros, but the exact number of such companies within New Zealand is still very vague. Despite the IRD not listing the audited companies, recently Microsoft New Zealand and Oracle New Zealand are required to provide their latest account on their use of transfer pricing for the purpose of audit. According to Microsoft, the audit on the company extends to June 2016, compared with the original timeline from June 2013 to June 2015.
The transfer pricing measure is expected to contribute another $50 million to the financial revenue. As regards measures in the Tax Bill, the interest deduction limitation rule is expected to bring an extra revenue amount of between $80 million to $90 million annually, and the hybrid mismatch rule is anticipated to generate additional tax $50 million on a yearly basis.
With the fast growth of China’s economy and the continuous improvement of the comprehensive strength of domestic enterprises, as well as the implementation of the “One Belt, One Road” policy, an increasing amount of Chinese enterprises are beginning to expand their global footprint and establish their presence in Europe.
TPA Global has developed a practical roadmap of 6 steps meant to guide CFOs in their Journey of rising above troubles to reach a situation of full control. These steps are presented in a series of short video clips (3-5 minutes):