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A tax bill which will counter base erosion and profit shifting by multinational companies has been introduced into Parliament today. The Taxation (Neutralising Base Erosion and Profit Shifting) Bill contains measures which will prevent multinationals from using:

– artificially high interest rates on loans from related parties to shift profits out of New Zealand;

– hybrid mismatch arrangements that exploit differences between countries’ tax rules to achieve an advantageous tax position;

– artificial arrangements to avoid having a taxable presence in New Zealand; and

– related-party transactions to shift profits into offshore group members in a manner that does not reflect the actual economic activities undertaken in New Zealand and offshore.

For more information see the bill, commentary on the bill and regulatory impact assessments.

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