New Zealand intends to introduce hybrid mismatch rules and will consult on new rules to prevent multinational corporations from stripping profits out of the country through excessive interest deductions, a policy paper written by the Inland Revenue Service says.
The tax agency also said in the June 27 paper that New Zealand intends to sign the OECD’s multilateral instrument to strengthen international tax rules regarding whether a business has a taxable presence in a country, to introduce a tax treaty anti-abuse rule, and to provide for new tax dispute resolution and arbitration procedures.
Further, New Zealand intends to apply the strengthened OECD transfer pricing guidelines developed during the OECD/G20 base erosion profit shifting (BEPS) project to determine how much of a multinational’s profit should be taxed in a particular jurisdiction, Inland Revenue Service said.
The agency further noted that, from October 1, new rules will apply the GST to cross-border services – including e-books, music, videos, and software purchased from overseas websites.
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