The OECD’s first batch of recommendations to address international tax avoidance, under the base erosion and profit shifting (BEPS) plan, addresses seven of the 15 areas—including the taxation of the digital economy, tax mismatches arising from hybrid financial arrangements, and various modifications to the international transfer pricing rules (with recommendations on the other eight areas to follow in 2015).
The BEPS proposals create both risks and opportunities for businesses in New Zealand and will impose additional, and significant, compliance costs on business operating cross-border, including New Zealand multinationals.
While the reports represent (largely) the consensus view of 44 countries, including New Zealand, the proposals are yet to be formally finalised and further evolution of the recommendations seems likely. There are, therefore, risks to early adoption by New Zealand of what are still technically draft measures, and without regard to how other countries may respond. This will remain a challenge for any government formed after this weekend’s election.
Read a September 2014 report [PDF 110 KB] prepared by the KPMG member firm in New Zealand: OECD releases first seven BEPS recommendations
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.