Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Exporters need transfer pricing clarity

17 March 2014

Exporters need transfer pricing clarity

The benefits of the New Zealand Government’s desire to push export led growth, as part of its overall economic strategy, could be stymied by a lack of clarity over proposed cross-border tax changes.

New research from the Grant Thornton International Business Report survey (IBR) reveals that New Zealand business leaders want more guidance relating to cross-border tax planning compared with 12 months ago, in stark contrast with the rest of the world.

Greg Thompson, Grant Thornton New Zealand Partner and National Director, Tax, said that on average the proportion of global business leaders who would welcome more co-operation and guidance from tax authorities on what is acceptable tax planning, dropped 15 percentage points to 53%.

“Large declines were seen in North America (-16%) and the EU (-15%) as well as in BRIC (-15%) and Asia-Pacific (-11%) economies. This indicates those business leaders have a greater level of comfort about their Government’s views on acceptable tax planning.

“In New Zealand, things have gone the other way – there has been a 6% increase in the number of businesses looking for clarity on this subject. Only Peru (18%), Ireland (12%) and Chile (10%) are ahead of New Zealand with greater increases to their concerns,” said Thompson.

“In the last year, especially since the headlines around the levels of corporation tax being paid by multinationals like Amazon, Apple, Google and Starbucks, there has been a lot of rhetoric, but not much tangible evidence of progress being made on this front.

“When multinationals like Amazon, Apple, Google and Starbucks were in the headlines last year it created some hysteria around the world, especially in Europe, America and Asia. This has died down as reflected in the survey showing a global average decline of 15%.

“New Zealand was not caught up in this hysteria and now we are starting to see more concern from New Zealand business leaders spurred by the apparent lack of progress. This is despite a number of exercises under way to establish greater clarity and transparency. For example, the OECD has been given a mandate by the G20 economies to prevent tax base erosion and profit shifting (BEPS) through reform at the global level. Real tangible and workable solutions still seem a long way off.

“Providing greater certainty around transfer pricing was high on the agenda at the World Economic Forum in Davos, Switzerland, earlier this year and remains a key issue for the G20. Much emphasis is now being focused on the G20 meeting in Brisbane in November.

“Media attention has certainly died down over the past year and some global businesses may feel that social pressures relating to tax planning have lessened. There may also be a sense among international corporations that governments are prepared to offer populist rhetoric but actually change very little; after all, these large companies are massive contributors of jobs and economic growth.

"The issue facing New Zealand, reinforced by public statements made by the Government, is that we are a small country and have to stand by and wait for the rest of the world to get clarity around these international tax issues including e-commerce and transfer pricing. Once that has happened, then we can react accordingly. We are the tail, not the dog.

“For the sake of New Zealand businesses, and the Government’s desire to push export led growth, let’s hope that the G20 will start to put some action around the volume of words that have already been spoken on the subject. And hopefully this will lead to further clarity around proposed cross-border tax changes for New Zealand businesses,” he said.

The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of more than 12,500 businesses per year across 45 economies. This unique survey draws upon 22 years of trend data for most European participants and 11 years for many non-European economies. For more information, please visit: www.internationalbusinessreport.com

Data collection
Data collection is managed by Grant Thornton's core research partner – Experian. Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. Fieldwork is undertaken on a quarterly basis. The research is carried out primarily by telephone.

Sample
IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with 3,500 chief executive officers, managing directors, chairmen or other senior executives from all industry sectors conducted between November and December 2013.

ENDS

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news