Opportunities to dodge tax are shrinking with the completion of a new tax agreement with Switzerland, Revenue Minister Stuart Nash announced today.
Mr Nash and the Swiss Ambassador David Vogelsanger have today signed documents to update the double tax agreement (DTA). The previous DTA was signed in 1980.
“Double tax agreements are good for business because they reduce barriers to trade and cross-border investment, eliminate double taxation, and reduce withholding taxes,” Mr Nash says.
“DTAs are also an extremely valuable tool to crack down on tax avoidance and tax evasion. They establish a formal means to exchange information between two countries.
“New Zealand has 40 DTAs. It is easier to update them since the OECD and G20 nations increased the focus on multinationals who often seem to not pay tax anywhere in the world. This led to the base erosion and profit shifting (BEPS) initiative which the coalition government ratified last year. The DTA with Switzerland includes BEPS measures.
“The new agreement includes provisions to reduce multinational tax avoidance by incorporating base erosion and profit shifting measures.
“In the year to March 2018, total New Zealand investment in Switzerland was approximately $246 million, while total Swiss investment in New Zealand was $2,290 million.
“Meanwhile work is also progressing on a protocol to the existing Tax Information Exchange Agreement with Guernsey and this should be concluded in the near future.
“With the work we’ve already done and the steady ongoing work to update our DTAs, the anti-BEPS net is closing ever tighter. The opportunities to dodge tax are vanishing,” says Mr Nash.
From the IRD News website | © Copyright 2020 Inland Revenue.