The Inland Revenue released a discussion document on implementing the automatic exchange of information (AEOI) regime. Once implemented, New Zealand financial institutions would need to report foreign account holders to countries that have also signed up for AEOI (i.e., 97 countries to date). Inland Revenue also confirmed that it will automatically and retrospectively exchange tax rulings—including details of all private taxpayer rulings and unilateral transfer pricing rulings, in effect as of 2014. The exchange will be with countries that have signed tax agreements with New Zealand (currently, over 50 tax treaties and tax information exchange agreements). Both changes were recommended as part of the OECD’s base erosion and profit shifting (BEPS) work.
The AEOI regime is modelled on the U.S. Foreign Account Tax Compliance Act (FATCA) regime. The AEOI requirements will apply to New Zealand financial institutions from 1 July 2017, with the first reporting due in mid-2018.
Inland Revenue also confirmed that it will automatically and retrospectively exchange tax rulings. Inland Revenue will share details of all private taxpayer rulings and unilateral transfer pricing rulings, in effect as of 2014. The exchange will be with countries that have signed tax agreements with New Zealand. Currently, there are over 50 tax treaties and tax information exchange agreements in the New Zealand treaty network.
This Inland Revenue treatment will mean foreign tax authorities will now have access to businesses’ commercial information provided in support of rulings. Could this have an adverse effect on the demand for rulings going forward? Some observers believe that it would.
Read a February 2016 report [PDF 596 KB] prepared by the KPMG member firm in New Zealand: Automatic exchange: account information and tax rulings
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.