Search results for

Greg Neill The New Zealand Inland Revenue has recently released a document detailing its compliance priorities for multinational enterprises doing business in New Zealand. The document is intended to provide such enterprises with transparency around Inland Revenue compliance initiatives so that these can be incorporated in processes relating to tax risk management and facilitate greater ease of doing business in New Zealand. While the Inland Revenue has historically published its annual compliance programme, this is the first time that a compliance document has been issued that is specifically tailored to multinationals. The document begins by noting that most corporate groups with over NZ$80 million ($65 million) in annual turnover will be subject to a specific compliance management programme. For example, such groups are expected to provide copies of their financial statements, tax reconciliations and group structures to the Inland Revenue concurrently with their annual income tax returns.

Erik Hultman

Whatever form and acronym it takes (a similar, though narrower, examination was conducted in the 1990s under the banner of harmful tax competition (HTC)), base erosion and profit shifting (BEPS) has been an underlying theme in international taxation for years. But only recently has it risen to the top of the international taxation and political agendas, no doubt accelerated by the tax planning opportunities opened up by the globalisation and mobility of commerce. With Australia poised to take on the presidency of the G20, David Bradbury, Assistant Treasurer until the September election, and a driving force behind much of Australia’s work on tackling BEPS, analyses the impact the country has had on this global debate, looking at the policies his government implemented to get to this stage, and how the new government can take things forward.

The OECD hosted a two-day public consultation on transfer pricing in November. One issue up for discussion included country-by-country reporting, with business recognising it will be implemented in some form.

Helen O’Sullivan, the president of the Irish Tax Institute, believes that while the Irish government’s International Tax Strategy Statement shows the importance of multinational investors to the economy, tax-competitive rules are as important to small and medium-size enterprises, who employ 70% of the country’s workforce.

Zoe Kokoni A European company (societas Europaea – SE) is an innovative public European company, that has been introduced by the European Regulation and Directive. The reason behind the European company was to create a European company with its own legislative framework, which would allow companies incorporated in different member states to merge or form a holding company or joint subsidiary, while avoiding the legal and practical constraints arising from the existence of different legal systems.

Bob van der Made

Elena Kostovska The FYR Macedonian government considers any interest income arising from loans as regular income, but there are specific points in relation to the interest rate worth surveying in detail, which are often neglected by taxpayers. In terms of loans between related entities (including physical persons who are capital shareholders in a resident company), the legislation has a specific perspective on the acceptable interest rates. For example, a loan extended by a resident legal entity to a physical person – shareholder or founder – can be defined to give rise to a specific annual interest rate but an average interest rate available from commercial banks in the country will also be taken into consideration and will impact the tax base for the entity extending the loan. Specifically, if a loan is granted from a legal entity to a shareholder (physical person) at a rate lower than that used by commercial banks, the difference in the interest income the entity would have generated if using the interest rate of the commercial banks and the income that the entity has in fact generated by using the lower rate is considered as "hidden revenue" and has the same treatment as an unrecognised expense, therefore effectively raising the year-end tax base for corporate income tax purposes.

David Cuellar

Sean Foley