Darshana Elwela analyses the New Zealand Internal Revenue current compliance focus for multinational enterprises.
The New Zealand Inland Revenue’s (IR’s) new multinational compliance focus guide highlights the key risk areas businesses need to focus on.
These issues are not just for global multinationals. Australian businesses with NZ operations should take note. For a start, IR’s ‘Basic Compliance Package’ – which requires business taxpayers to provide additional information for IR’s risk assessment purposes – has been extended to all foreign owned groups with NZ turnover of NZ$30m+.
This starts with the Board setting the right tone from the top. IR expects the firm’s tax strategy to be documented, kept up to date, and for compliance to be routinely monitored.There is also a strong push for companies to publicly disclose their NZ tax data. While NZ does not have the same tax transparency measures as Australia, the trend is clear. Greater transparency, not less, and for more and more businesses.
Some of the issues to consider include:
IR is embarking on a business transformation. This will impact how it interacts with business on NZ income tax, GST, PAYE and withholding taxes in the "future state".
The focus is on digital – i.e. interacting directly with your accounting and payroll systems – with faster and greater provision of information resulting.
The future is sooner than you think. With a 2017-19 implementation time frame, businesses need to start thinking now about how these changes will impact their systems and future interactions.