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

 

Budget Policy Statement: Spending Wins Over Tax Cuts; Big Ticket Items Get Boost

Income tax cuts are on hold as the government says “responding to the earthquakes and reducing debt are currently of higher priority”, although election year tax sweeteners remain possible. More>>

ALSO:

Fishy: Is Whitebaiting Sustainable?

The whitebait fry - considered a delicacy by many - are the juveniles of five species of galaxiid, four of which are considered threatened or declining. The SMC asked freshwater experts for their views on the sustainability of the whitebait fishery and whether we're doing enough to monitor the five species of galaxiid that make up whitebait. More>>

ALSO:

Crown Accounts: Smaller-Than-Expected Four-Month Deficit

The New Zealand government's accounts recorded a smaller-than-forecast deficit in the first four months of the fiscal year on a higher-than-expected inflow of corporate and goods and services tax. More>>

ALSO:

On For Christmas: KiwiRail Ferries Back In Full Operation After Quake

KiwiRail’s Interislander ferries are back in full operation for the first time since the Kaikoura earthquake, with the railspan that allows rail wagons to be loaded on the Aratere now restored. More>>

ALSO:

Comerce Commission Investigation: Prosecutions Over Steel Mesh Labelling

Steel & Tube Holdings, along with two other companies, will be prosecuted by the Commerce Commission following the regulator's investigation into seismic steel mesh, while Fletcher Building's steel division has been given a warning. More>>

ALSO:

Wine: 20% Of Marlborough Storage Tanks Damaged By Quake

An estimated 20 percent of wine storage tanks in the Marlborough region, the country’s largest wine producing area, have been damaged by the impact of the recent Kaikoura earthquake. More>>

ALSO:

ACC: Levy Recommendations For 2017 – 2019 Period

• For car owners, a 13% reduction in the average Motor Vehicle levy • For businesses, a 10% reduction in the average Work levy, and changes to workplace safety incentive products • For employees, due to an increase in claims volumes and costs, a 3% increase in the Earners’ levy. More>>

Get More From Scoop

 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news