New Zealand Inland Revenue expands monitoring of large taxpayers
The New Zealand Inland Revenue has announced that it will be increasing the number of large taxpayers that it monitors as part of its Basic Compliance Package (BCP). Inland Revenue's announcement comes at a time of increased media and political attention on the tax affairs of foreign-owned multinational groups.
Approach towards large taxpayer compliance
All large taxpayers are subject to an annual compliance review by Inland Revenue. The BCP requires taxpayers to supply information to Inland Revenue each year, including details of the group's structure, its financial
Since 2012, around 600 New Zealand and foreign-owned groups have been subject to the BCP. In addition to the BCP, the compliance activities of the largest 50 corporate taxpayers are account managed by Inland Revenue on a one-to-one basis.
Expansion of the BCP
From 2017, the number of groups subject to the BCP will increase to around 900, including all foreign-owned multinational groups that have a turnover of more than NZ$30 million ($21 million). This represents a significant expansion of the BCP as a compliance tool, highlighting Inland Revenue's preference for receiving comprehensive and
As indicated above, the announcement coincides with questions raised by the media and opposition members of parliament about the declining number of audits carried out by Inland Revenue on large taxpayers. Inland Revenue's statement on the measure on September 30 acknowledged that the "no surprises environment" created by the BCP has reduced the need for formal audits on large enterprises to be undertaken.
OECD's guidance on tax control frameworks
Inland Revenue's Large Enterprises Update (August 2016) recorded Inland Revenue's support for the OECD's Guidance on Tax Control Frameworks, recently released by the
Should only engage in tax planning that is aligned with commercial and economic activity and
ensureit does not lead to an abusive result;
Should interpret relevant tax laws in a reasonable way, consistent with a relationship of "co-operative compliance" with tax authorities; and
Be open and transparent with tax authorities in each jurisdiction about their tax affairs and provide the relevant, reasonably requested information (subject to appropriate confidentiality provisions) that is necessary to enable a reasonable review of possible tax risk.
James Lester (email@example.com)
Tel: +64 4 819 7755