Tax Tips Alert: New Zealand's international tax rules

It’s a brave new world for New Zealand’s international tax rules:

Now is the time to get prepared and be ready for the significant wave of changes

The anticipated changes to New Zealand’s cross-border tax regime are now very close to becoming a reality. On 15 May, the Finance and Expenditure Committee (the FEC) reported back to Parliament on the Taxation (Neutralising Base Erosion and Profit Shifting) Bill (the Bill), which was released before Christmas last year. The FEC supports the proposed application date of 1 July 2018. If your business has a connection outside of New Zealand, now is the time to ensure you are up to speed with the changes and the effect they might have on your business. Your PwC team want to help, and can draw on our experts in this area to assist.

Our December 2017 Tax Tips Alert provides more detail on the proposed changes as first introduced. The FEC has recommended proceeding with the proposals largely unchanged, albeit with some important exceptions outlined in our summary below.

We are pleased to see clarifications on some of the uncertainties identified during the consultation process. However, overall, it is disappointing to see the number of submissions rejected by the FEC. Despite some improvements in drafting and design in various areas, we consider that the Bill remains overly complicated, difficult to understand, and unworkable in some cases. We welcome the recommendation that further Inland Revenue guidance will be provided on some (but not all) of the changes. However, we question the timeliness of the guidance for taxpayers wanting to restructure their arrangements now to comply with the new rules before they take effect.