Latest measure to help combat BEPS welcomed
Revenue Minister Michael Woodhouse says the recent signing of the Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports will help ensure large multinationals pay their fair share of tax by providing for increased sharing of information between revenue authorities.
“Some large multinationals often have intricate financial arrangements in place to minimise or eliminate tax obligations on their earnings, known as base erosion and profit shifting (BEPS),” Mr Woodhouse says.
“This new country-by-country reporting agreement goes to the very heart of such activity by allowing participating tax jurisdictions to share and receive information about these large multinationals.
“Under the agreement, large multinationals will have to provide information relating to economic activity, including the global allocation of income and taxes paid.
“Each revenue authority collecting this information will then be able to exchange that information with other treaty partners under the exchange of information arrangements.
“It will also provide a complete picture of each company’s activities in all countries and so encourage compliance and make it easier to spot any tax wrongdoing.
“This Agreement delivers on one of the recommendations in the OECD’s BEPS Action Plan and builds on Inland Revenue’s work to ensure that large multinationals pay their fair share of tax.”
The recent Agreement was signed by officials from NZ, Canada, China, Iceland, India and Israel, taking the total number of signatories to the Agreement to 39 countries.