Inland Revenue announced relief concerning advance pricing agreement (APA) reporting and compliance, and in particular with regard to possible breaches in the terms of an APA during the coronavirus (COVID-19) pandemic.
The Inland Revenue guidance permits companies to make crucial business decisions that may have arm’s length implications that in turn may result in breaches of an existing APA without having to notify Inland Revenue. Previously under the terms of an APA, companies were expected to discuss any APA breaches with Inland Revenue and to disclose the implication of these breaches on the validity of the APA prior to filing (lodging) an annual compliance report.
Because companies will no longer be required to discuss breaches (or potential breaches) with Inland Revenue during this time, these breaches will need to be addressed in the annual compliance report when it is filed with Inland Revenue. Under this relief, Inland Revenue will review the annual compliance reports in due course and keeping in mind the implications of COVID-19 for the business.
Once the disruption caused by COVID-19 has significantly passed, APAs will potentially be reset or reconsidered with Inland Revenue.
For more information, contact a tax professional with KPMG’s Global Transfer Pricing Services in New Zealand:
Kim Jarrett | +64 9 363 3532 | email@example.com
Kimberley Bruneau | +64 9 367 5800 | firstname.lastname@example.org
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