NZ to crack down on foreign-owned company taxes
(12 May 2015 – New Zealand) The New Zealand Bankers’ Association (NZBA) will be looking closely at proposals put forward in a discussion paper released by Revenue Minister Todd McClay regarding foreign-owned company taxes.
Under the proposal, loopholes would be closed surrounding non-resident withholding tax (NRWT) meaning companies like the major Australian banks would end up contributing largely to the estimated extra tax revenue of NZ$50 million (A$47.2 million) annually.
Without these changes foreign companies can essentially shift profits out of New Zealand with no or minimal New Zealand tax paid.
The rule changes are in line with a larger programme of work by the Organisation for Economic Cooperation and Development to clamp down on multinational tax rorts.
NZBA chief executive Kirk Hope told Fairfax NZ the banking industry would study the proposals closely and make a full submission.
He said banks took their tax obligations seriously and the industry supported tax reforms that made sense and got the balance right between workable regulation and economic growth.
"It's important to note though that the New Zealand economy relies on offshore capital to fund our businesses and households.
"Any tax changes that unnecessarily make raising this capital more expensive will potentially mean increased lending costs for New Zealand businesses and households," he said.