New Zealand considers tightening withholding tax rules for interest paid to nonresidents

New Zealand’s government on May 7 released a white paper which makes a variety of recommendations on ways to close loopholes in the 10 percent non-resident withholding tax on related party debt.

Minister of Revenue Todd McClay said that Inland Revenue’s audit activity had uncovered instances where large multinationals were using sophisticated techniques to defeat the tax.

McClay added that the issues involve domestic law and are consistent with the aims of the OECD’s action plan on base erosion and profit shifting.

Comments on the draft are requested by June 16.

See:

• NRWT: related party and branch lending

For analysis of the paper, see:

• KPMG