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New Zealand: BEPS implementing legislation update; transfer pricing rules

New Zealand: BEPS implementing legislation update

A bill that would implement certain base erosion and profit shifting (BEPS) recommendations has been reported back by the Finance and Expenditure Select Committee after consideration and public submissions. The amendments are reported to be largely minor and include clarifications.


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The bill was referred to the Finance and Expenditure Select Committee in late 2017— Read TaxNewsFlash—and the proposed changes to the transfer pricing and thin capitalisation rules, limitations on setting related-party debt interest rates, and introduction of new deemed permanent establishment (PE) and hybrid rules were all recommended to proceed. 

There were also submissions recommending that the BEPS legislation be deferred to allow further consideration of the right approach for New Zealand. In the absence of a deferral, those making submissions sought greater certainty of application of what are believed to be complex proposals.

There is some tinkering with the legislation, mainly aimed at clarification at the edges. The most significant changes affect the rules for setting related-party debt interest rates. The bill is pending enactment by 30 June 2018 (due to the 1 July effective date for a number of the proposals).


Read a May 2018 report [PDF 197 KB] prepared by the KPMG member firm in New Zealand

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