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


Combating multinational tax avoidance

Combating multinational tax avoidance

A global tax expert and academic from the University of Auckland is heading to Brazil this week to give a presentation to the International Fiscal Association (IFA) addressing the common methods used by multinational companies to avoid paying tax.

Professor Craig Elliffe from the Auckland Law School has been invited to speak at the 71st Congress of the IFA being held in Rio de Janeiro between 27 August and 1 September, on the tax implications of fragmenting contracts and activities.

Multinational tax avoidance has received considerable attention in New Zealand and throughout the world. Some multinational corporations have developed a series of strategies to minimise taxation in the countries in which they do business.

In particular, they have developed techniques which avoid taxation by avoiding having a taxable presence. A simple example of this is in the area of contract splitting.

In New Zealand, a taxable presence exists where a business undertakes an installation project for greater than a 12-month period. If the foreign enterprise structures the arrangement so that they have two consecutive 11-month projects undertaken by different but commonly owned subsidiaries then the rule is technically not met.

There has been a significant response from the OECD and G20 countries with proposals to counter this as part of Actions 6 and 7 of the Base Erosion and Profit Shifting (BEPS) project. The BEPS project on multinational tax avoidance has received considerable attention in New Zealand and throughout the world.

The OECD proposes new tests which will be incorporated into the multilateral convention which New Zealand signed in July. The multilateral instrument varies our existing tax treaty settings.

A new OECD Model with significant strengthening of anti-avoidance rules is proposed in 2017 and this will influence new bilateral negotiations. New Zealand has also developed its own unilateral solutions to multinational tax avoidance which are being rolled out in consultation with the business community and professional advisory groups.

The 71st IFA Congress has over 2000 attendees made up of lawyers, accountants, revenue officials and academics from all around the world.

Founded in 1938 with its headquarters in the Netherlands, the IFA It is the only non-governmental and non-sectoral international organisation dealing with fiscal matters.

New Zealand has a strong presence at this year’s IFA Congress with the session that Professor Elliffe is taking part in being chaired by Carmel Peters from New Zealand’s Inland Revenue, where she heads the international tax policy team.

Professor Elliffe holds a Chair in Taxation at the University of Auckland.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Fuel Leak: Refinery Prepares To Repair Damaged Pipeline

Refining NZ has confirmed that it is to start repairs on a section of its multi-product fuel pipeline which was shut down following a jet fuel leak last Thursday. More>>uption.htm">More>>


StatsNZ: Economy Grows 0.8% In June Quarter

“Strong export and domestic demand underpinned growth this quarter,” national accounts senior manager Gary Dunnet said. “Demand for exports has resulted in strong production growth in manufacturing and service industries.” More>>


Stats NZ: Annual Net Migration Remains High

Annual net migration was 72,100 in the August 2017 year... Migrant arrivals reached 132,200, a new annual record, and migrant departures were 60,100 in the year ended August 2017. More>>


Expert Reaction: Cassini's Grand Saturn Finale

After a 20 year mission, NASA's spacecraft Cassini will meet its demise this week by plunging into Saturn's atmosphere and burning up. More>>


Jurisdiction: Court Rejects Cathay Unit's Retirement Age Of 55 For Pilots

The Supreme Court has backed two Auckland-based Cathay Pacific pilots who claimed local law meant they couldn't be forced to retire at 55. More>>


Supreme Court: AFFCO Loses Lockout Appeal

The essential question in the appeal was whether those who presented themselves for work at the beginning of the 2015/2016 season were at that time “employees” for the purposes of the lockout provision... This Court has unanimously dismissed the appeal. More>>