Dunne welcomes beginning of OECD multinationals tax work

Revenue Minister Peter Dunne today welcomed the release of an OECD report which calls upon member countries, including New Zealand, to develop a shared response to the question of taxing large multinational companies.

“The issue of large multinationals shifting their profits to countries in order to gain the most favourable tax result is of huge importance to OECD member states who are concerned about how this practice can distort and erode their respective tax bases,” Mr Dunne said.

“The OECD’s report is a good starting point for member states to confront the matter and develop a shared view of ways to deal with it,” he said.

The next steps will be for OECD states to develop an action plan to tackle the issue of base erosion and profit shifting.

“New Zealand has always been a very active participant in this area and our representatives will continue to be deeply involved because we are committed to developing and being part of a strong global response,” Mr Dunne said.

He said that co-operating internationally on base erosion and profit-shifting issues would also help New Zealand to improve its domestic rules.

“We already use a range of tools to counter the problem, including information exchange agreements with other countries, withholding taxes, transfer pricing rules, thin capitalisation rules and in certain cases, our general anti-avoidance rule.

“The OECD work will help New Zealand and other countries to identify weaknesses in their rules and to ensure that international tax frameworks keep pace with new business models.

“It is not going to be an overnight remedy – that is simply not possible. But with nations co-operating in this way, we will develop a sound set of tax policies which will mean that the days of large multinationals escaping taxation will be numbered,” Mr Dunne said.

The full OECD report is available at
www.oecd.org/newsroom/oecd-urges-stronger-international-co-operation-on-corporate-tax.htm