New Zealand: BEPS implementing legislation | KPMG | US

New Zealand: BEPS implementing legislation would affect related-party loans

New Zealand: BEPS implementing legislation

A bill concerning base erosion and profit shifting (BEPS) has been introduced in New Zealand that would implement the government’s policies concerning BEPS matters.


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There are provisions in the bill that would

  • Reduce interest rates allowed on inbound related-party loans
  • Narrow thin capitalisation “safe harbour” protection
  • Revise the transfer pricing rules to expand the authority of the Inland Revenue
  • Broaden the permanent establishment rules (including a new avoidance rule) 
  • Deny deductions and subject income to tax in relation to “hybrid” instruments and entities


The bill has been referred to the Finance and Expenditure Select Committee for consideration and public submissions. While it is due to be reported back by 12 June 2018, the bill’s proposals generally would be effective for income years beginning on or after 1 July 2018.


Read a December 2017 report [PDF 193 KB] prepared by the KPMG member firm in New Zealand

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