New Zealand - International questionnaire for tracking BEPS
International Questionnaire for Tracking Base Erosion and Profit Shifting by Multinationals
International tax matters have always been a priority for New Zealand Inland Revenue (NZIR), and the increasing global focus on base erosion and profit shifting (BEPS) has brought such matters further to the forefront in recent years. NZIR has an extensive international compliance programme, in particular covering multinational enterprises (MNEs) with local turnover in excess of NZ$30 million.
We take a proactive intelligence-led approach to assure compliance by these MNEs. In 2015, we introduced the compulsory International Questionnaire (IQ) to improve our understanding of major international matters, especially their relative significance to New Zealand. The IQ is designed to collect in a very efficient way key information about a range of potential tax risks, especially those relating to financing and transfer pricing.
Our experience over these last four years is that this additional information has:
Ø Considerably enhanced our knowledge and appreciation of tax risks posed by MNEs;
Ø Enabled NZIR to tailor and prioritise interventions to facilitate compliance by MNEs; and
Ø Informed key policy decision-making in relation to improving the effectiveness of our tax law to counter BEPS practices of MNEs.
We have refined the IQ each year to maintain currency and address any new or emerging risks. For example, last year we added a question about derivatives and this year we are collecting additional information about finance guarantee fees. However, we have been conscious throughout to keep the IQ concise and straightforward to minimise compliance costs and ensure quality answers.
Our latest IQ can be found by visiting our website (www.ird.govt.nz) and searching on “International Questionnaire”. Summary results from past IQ responses can also be found on the same site.