New Zealand to wait 5 years before joining anti-tax evasion initiative
WELLINGTON, Oct. 29 — New Zealand is to join a global scheme to fight tax evasion by multi-national companies in 2019, Revenue Minister Todd McClay said Wednesday, prompting criticism that he was offering a five-year “tax holiday” for foreign firms.
G20 leaders announced the initiative for an automatic exchange of information in September last year, and New Zealand joined a declaration of support for the move with other developed countries in May.
New Zealand would align its timetable with Australia and begin a voluntary exchange of information from 2018, aiming for mandatory reporting in 2019, giving the financial industry enough time to comply with the initiative, McClay said in a statement.
“Multinational companies that use base erosion and profit shifting measures to avoid tax is a global problem and we are committing to joining other OECD (Organization for Economic Co- operation and Development) countries in finding a global solution, ” he said.
“The automatic exchange of information initiative will set a global standard for sharing information. It will operate much like the recently introduced U.S. Foreign Account Tax Compliance Act where financial institutions will provide information on account holders’ financial assets to their local tax authority.”
However, the main opposition Labour Party said the government had gifted a five-year tax holiday for foreign companies dodging tax payments.
“This isn’t good enough. While international cooperation is important, the government should be looking at moves it can take right now, not some time in the future,” Labour revenue spokesperson David Clark said.
“It’s a simple principle. If you make a profit here, you need to pay tax here.”
