No reason for govt to delay reform on multinational tax avoidance, say Greens

The Government is being blasted as weak, for not taking action on companies dodging tax.

Apple has been slapped with a $20 billion tax bill in Ireland, which has led to questions about whether tax avoidance is also happening in New Zealand.

Prime Minister John Key said we could face similar issues here, but it’s best to wait for the results of an OECD working group that we’re part of to see if potential loopholes could be tightened.

He said Apple in New Zealand was probably paying its fair share of tax “if you look at the current tax rules and the way they intersect with the different tax rules around the rest of the world.”

“I don’t have any advice that they are doing anything illegal, that’s for sure.

“But the question is whether the mismatch of all of those rules is something these multinationals can arbitrage, and if they are, then we would say on balance that’s not fair even if it’s legal.

“That’s really what the OECD is trying to do – to try and say ‘well collectively, can we all hold hands and make sure that those loopholes disappear.

“We expect a New Zealand company to pay its fair share of tax; we expect a New Zealand citizen to pay their fair share of tax. Should we expect a multinational to play by different rules?”

But Green Party finance spokesperson Julie Anne Genter said there’s no reason to delay reform.

She said a crack down on companies dodging tax must happen sooner rather than later.

“The National Government has consistently been weak on this issue, and ultimately it’s disadvantaging New Zealand and especially small businesses in New Zealand,” she said.

“Just in the last two years, the US, the UK and Australia have all taken action to crack down on multi-national tax avoidance, and that’s something New Zealand can be doing too.”

Commenting on the Australian Government’s new policy to tax multinational companies caught trying to divert profits overseas for tax avoidance at 40 per cent instead of 30 per cent, John Key said the advice he had had was to move on the multinational front.

“We are a bit dubious about whether what has been announced in Australia will actually work but we will certainly have a look at it.”