Tax Tips Alert:
New country-by-country reporting – Inland
Revenue’s approach
Inland Revenue has released its intended approach to implementing the
OECD’s recommendations set out in Action 13, relating to transfer pricing
documentation and country-by-country reporting (CbCR). This follows the
OECD’s release of its Final Reports on Base Erosion and Profit Shifting (BEPS)
in October this year (see Tax Tips Special: Impact of final BEPS reports – a game
changer for many businesses).
From 2017, New Zealand headquartered
corporate groups with annual global revenue
exceeding NZ$ 1.2 billion will be required to
produce CbCR for the 2016 financial year and
subsequent years thereafter. The documentation
is expected to list the entities within the group
and detail the main business activity of each.
Financial information and information relating to
tangible assets held will also need to be provided
for each jurisdiction in which the group operates.
Inland Revenue is still considering whether a law
change is required or whether the current law is
sufficient to implement these new requirements.
Inland Revenue anticipates that the new CbCR
requirements will affect only 20 New Zealand
head-quartered corporate groups, and will contact
each group directly to ensure they are adequately
prepared for the new CbCR requirements.
However, a significant number of New Zealand
subsidiaries will also be impacted to the extent that
their offshore parent companies are required to
prepare CbCR in their home jurisdictions.
Affected groups should contact their transfer
pricing advisers in advance of Inland Revenue
contact in order to assess the impact of the
expected CbCR requirements and to begin
preparing for the change as soon as possible.
As part of a multinational package, the Australian
Parliament has already taken steps to implement
Action 13 within the Australian tax regime. Effective
from 1 January 2016, CbCR will be a legislative
requirement applying to Australian head quartered
corporate groups with annual global revenue
exceeding AU$ 1 billion. Under the new law, the
parent company will be required to file CbCR with the
home tax authority. A local and master file will need
to be filed with the Australian Taxation Office (ATO).
The ATO is expected to release further guidance
relating to the administration of CbCR in 2016.
The Australian multinational package also
introduces new financial reporting disclosure
requirements, a new multinational anti
avoidance law (MAAL), and increased penalties
on adjustments made by the ATO in relation
to anti-avoidance and transfer pricing. Further
details relating to the impact of the new package
on multinationals operating within Australia are
available in PwC Australia’s Tax Talk Alert.
For more information about
the practical implications of
implementing CbCR, please refer
to our website.
Get in touch
If you would like to discuss your situation in more detail, please contact:
Erin Venter
Director, Transfer Pricing
T: +64 9 355 8862
E: erin.l.venter@nz.pwc.com
Richard McGill
Director, Transfer Pricing
T: +64 3 374 3093
E: richard.j.mcgill@nz.pwc.com
Briar Williams
Director, International Tax
T: +64 9 355 8531
E: briar.s.williams@nz.pwc.com
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