NZ working on OECD tax avoidance plan

Senior New Zealand tax officials are this week working with the OECD in Paris to prepare for delivery of the first parts of the OECD’s action plan to counter base erosion and profit shifting, says Revenue Minister Todd McClay.

A 15 point action plan was developed by the OECD late last year as a response to base erosion and profit shifting (BEPS) measures used by some multinational companies to avoid taxation.

“Now that we are nearing completion of the first parts of the plan our officials are at the OECD supporting their delivery,” Mr McClay says.

The first seven deliverables from the OECD action plan are scheduled for September this year.

“Decisions by the OECD can have an impact on the interpretation of tax treaties and can affect the allocation of taxes among countries. Inland Revenue has been participating in the OECD’s work to ensure that they apply properly in the New Zealand context.”

“Designing, running and maintaining a tax system is a very different business today from what it was just a few decades ago. Advances in electronic communications and changed business practices mean that opportunities for tax avoidance and evasion arise more commonly due to differing tax treatments across jurisdictions.”

“For that reason, it makes sense for nations to collaborate and share information appropriately.”

“By contributing to discussions on the growth of the digital economy, its impact on tax bases and possible solutions to combatting the BEPS problem, New Zealand is playing a very active role in dealing with these global issues,” Mr McClay says.