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Inland Revenue ramping up scrutiny of big business taxpayers

Inland Revenue ramping up scrutiny of big business taxpayers

30 September 2016

Inland Revenue is increasing the number of large companies, including foreign-owned multinationals, that come under close scrutiny to make sure they are paying the right amount of tax.

Since 2012, 600 New Zealand and foreign–owned groups have been under IR’s magnifying glass.

From next year, in a move first signalled in 2013, this will expand to 900 groups including all foreign-owned multinationals with turnover more than $30m.

International Revenue Strategy Manager John Nash says big business tax compliance today is about a whole lot more than audits.

“Now these big companies and multinationals are intensely monitored on an almost real-time basis,” he said.

“We’ve adopted a targeted compliance programme to help New Zealand’s biggest corporate taxpayers get it right and to make sure they are paying what they should.

“A lot of work has been done in this area and we are confident that the large companies we’re working with are paying the right amount of tax.”

The 50 largest corporate taxpayers receive even closer attention and are account managed on a one-to-one basis.

“This approach has reduced somewhat, the need to undertake large audits for years after tax returns are filed and we’ve created a no surprises environment when it comes to tax.”

All 900 companies must submit what’s called the Basic Compliance Package, which means they have to supply annual information on their group structure, financial statements and tax reconciliations.

“This approach and success in the courts combating aggressive tax planning is leading to improved compliance and a reduced appetite for pushing boundaries among the corporate community,” Mr Nash said.

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