New Zealand

1. New Zealand was first reviewed during the 2017/2018 peer review. This report is supplementary to New Zealand’s 2017/2018 peer review report (OECD, 2018[1]). The first filing obligation for a CbC report in New Zealand applies to reporting fiscal years commencing on or after 1 January 2016.

Summary of key findings

2. New Zealand’s implementation of the Action 13 minimum standard meets all applicable terms of reference (OECD, 2017[2]).

Part A: The domestic legal and administrative framework

3. New Zealand has existing powers in the Tax Administration Act 1994 which can be relied on to implement the BEPS Action 13 minimum standard. An update has been reported since the 2017/18 peer review: legislation addressing base erosion and profit shifting has been passed into law, including a specific provision on CbC reporting, with Royal assent received on 27 June 2018.

(a) Parent entity filing obligation

4. No changes were identified with respect to the parent entity filing obligation. New Zealand’s 2017/18 peer review included monitoring points which remain in place.1 2

(b) Scope and timing of parent entity filing

5. No changes were identified with respect to the scope and timing of parent entity filing.

(c) Limitation on local filing obligation

6. No changes were identified with respect to the limitation on local filing obligation.

(d) Limitation on local filing in case of surrogate filing

7. No changes were identified with respect to the limitation on local filing in case of surrogate filing.

(e) Effective implementation

8. No changes were identified with respect to the effective implementation.3

Conclusion

9. There is no change to the conclusion in relation to the domestic legal and administration framework for New Zealand since the previous peer review. New Zealand meets all the terms of reference in relating to the domestic legal and administrative framework.

Part B: The exchange of information framework

(a) Exchange of information framework

10. As of 31 May 2019, New Zealand has 65 bilateral relationships in place, including those activated under the CbC MCAA and under bilateral CAAs. Within the context of its international exchange of information agreements that allow automatic exchange of information, New Zealand has taken steps to have qualifying competent authority agreements in effect with jurisdictions of the Inclusive Framework that meet the confidentiality, consistency and appropriate use conditions.4 Regarding New Zealand’s exchange of information framework, no inconsistencies with the terms of reference were identified.

(b) Content of information exchanged

11. New Zealand has processes in place that are intended to ensure that each of the mandatory fields of information as required in the CbC template are present in the information exchanged. It has provided details in relation to these processes.

(c) Completeness of exchanges

12. New Zealand has processes in place that are intended to ensure that CbC reports are exchanged with all tax jurisdictions listed in Table 1 of a CbC reporting template with which it should exchange information as per the relevant QCAAs. It has provided details in relation to these processes.

(d) Timeliness of exchanges

13. New Zealand has processes in place that are intended to ensure that the information to be exchanged is transmitted to the relevant jurisdictions in accordance with the timelines provided for in the relevant QCAAs and terms of reference. It has provided details in relation to these processes.

(e) Temporary suspension of exchange or termination of QCAA

14. New Zealand has processes in place that are intended to ensure that a temporary suspension of the exchange of information or termination of a relevant QCAA be carried out only as per the conditions set out in the QCAA. It has provided details in relation to those processes.

(f) Consultation with other Competent Authority before determining systemic failure or significant non-compliance

15. New Zealand has processes in place that are intended to ensure that the Competent Authority consults with the other Competent Authority prior to making a determination that there is or has been significant non-compliance with the terms of the relevant QCAA or that the other Competent Authority has caused a systemic failure. It has provided details in relation to those processes.

(g) Format for information exchange

16. New Zealand confirms that it uses the OECD XML Schema and User Guide (OECD, 2017[6]) for the international exchange of CbC reports.

(h) Method for transmission

17. New Zealand indicates that it uses the Common Transmission System to exchange CbC reports.

Conclusion

18. New Zealand has in place the necessary processes to ensure that the exchange of information is conducted in a manner consistent with the terms of reference relating to the exchange of information framework. New Zealand meets all the terms of reference regarding the exchange of information.

Part C: Appropriate use

19. No changes were identified in respect of appropriate use. There were no recommendations issued in the 2017/2018 peer review.

20. No information or peer input was received for the reviewed jurisdiction suggesting any issues with appropriate use.

Conclusion

21. New Zealand meets all the terms of reference relating to the appropriate use of CbC reports.

Summary of recommendations on the implementation of country-by-country reporting

Aspect of the implementation that should be improved		Recommendation for improvement
Part A	Domestic legal and administrative framework	-
Part B	Exchange of information framework	-
Part C	Appropriate use	-

Notes

← 1. The definition of a “large multinational group” in the legislation does not include the “deemed listing provision” as required under the terms of reference. However, New Zealand notes that the financial reporting requirements in New Zealand apply to large entities (including companies, partnerships and limited partnerships) regardless of whether they are listed on a stock exchange. A “large entity” is defined in the Financial Reporting Act 2013 as an entity that earns over NZD 30m of consolidated revenues (which is much lower than EUR 750m) or that have over NZD 60m of consolidated assets in the previous two years. New Zealand also confirms that in the very unlikely event that an entity did not prepare consolidated financial statements and would be considered as an “Ultimate Parent Entity” further to the “deemed listing provision” (as per paragraph 18.i. of the terms of reference), the existing powers of Section 17 of the Tax Administration Act 1994 will be relied on to request the information. This will be monitored.

← 2. As New Zealand continues to rely on existing powers in the Tax Administration Act 1994 until legislation is finalised, and because the effectiveness of this system still relies on the fact that the Inland Revenue correctly identifies all New Zealand resident entities that are the Ultimate Parent Entity of an MNE group within the scope of CbC Reporting and issues a notification, the monitoring point in the 2017/2018 peer review relating to New Zealand’s framework remains.

← 3. New Zealand’s 2017/2018 peer review included a general monitoring point relating to a specific process to that would allow to take appropriate measures in case New Zealand is notified by another jurisdiction that such other jurisdiction has reason to believe that an error may have led to incorrect or incomplete information reporting by a Reporting Entity or that there is non-compliance of a Reporting Entity with respect to its obligation to file a CbC report. This monitoring point remains in place.

← 4. No inconsistency with the terms of reference will be identified where a QCAA is not in effect with one or more jurisdictions of the Inclusive Framework that meet the confidentiality, consistency and appropriate use conditions, but this is due to circumstances that are not under the control of the reviewed jurisdiction. This may include, for example, where the other jurisdiction intends to exchange CbC reports using the MCAA but it does not have the Convention in effect for the relevant fiscal period, or where the other jurisdiction has declined to have a QCAA in effect with the reviewed jurisdiction.

New Zealand