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Tighter tax rules for multi-nationals

NZ NewswireNZ Newswire 27/06/2016

The government is going to tighten the tax rules around multi-national companies.

Revenue Minister Michael Woodhouse says multi-nationals can exploit discrepancies in the tax rules of different countries so they pay little or no tax.

New Zealand has been working with the OECD to develop a global response, and the government is going to make changes in line with the international action plan released in October.

"Our tax settings are already sound, but there is always room to improve," Mr Woodhouse said on Monday.

"The next steps include stronger rules preventing excessive payments from a New Zealand company to its foreign parent, greater disclosure requirements for multi-nationals, and further sharing of tax data with foreign authorities."

Mr Woodhouse says the problem stems from mismatched legislation in different countries, which is why an international solution has to be found.

In March this year it was reported many of the worlds largest multi-nationals were paying little or no tax in New Zealand despite recording billions of dollars worth of sales here.

Twenty of some of the world's most-recognised businesses, including Facebook, Google and Pfizer, paid just $1.8 million in taxes in 2014 despite reporting nearly $10 billion in Kiwi sales, the New Zealand Herald reported.

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