New Zealand Joins OECD In Plan To Stop Multinational Profit Shifting
WELLINGTON, June 23 (Bernama) — New Zealand tax officials are helping the Organisation for Economic Co-operation and Development (OECD) group of developed nations to deliver the first part of a plan to stop base erosion and profit shifting, Revenue Minister Todd McClay said Monday.
The first seven “deliverables” of a 15-point action plan developed by the OECD late last year were scheduled to be released in September as a response to base erosion and profit shifting (BEPS) measures used by multinational companies to avoid taxation, Xinhua news agency reports.
“Decisions by the OECD can have an impact on the interpretation of tax treaties and can affect the allocation of taxes among countries,” McClay said.
Advances in electronic communications and changed business practices meant opportunities for tax avoidance and evasion were more common and for that reason, it made 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,” McClay said.
The announcement came the same day it was reported that Google Inc., which made US$15.42 billion globally in the quarter ending March, reported an after-tax loss of more than 60,000 NZ dollars (US$52,457) in New Zealand last year on revenues of 10.13 million NZ dollars (US$8.85 million).
Opposition politicians in New Zealand have criticised overseas-based multinationals that report their revenues in low-tax jurisdictions such as Ireland in order to minimise their tax bills.
