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Our international tax work aims to ensure we comply with all international standards and maintain Aotearoa New Zealand's positive international reputation.

We do this by exchanging information with other countries, using the information and intelligence we receive from our treaty partners, administering the foreign trust regime and supporting customers to deal with any compliance issues resulting from the pandemic.

Inland Revenue published a new offshore compliance package in June 2022, which provides customers and tax agents with the information they need to get their international tax affairs right from the start. This includes paying tax on their worldwide income.

Compliance Focus for Individuals

Aotearoa New Zealand has information-sharing agreements with over 70 jurisdictions. These agreements enable us to deter, detect and address international tax evasion like never before.

We take the same customer-centric approach to international tax as we do with all our compliance work. This means we help customers get their tax right from the start.

The customers we've worked with this year include 1,200 significant enterprises - corporate groups with a turnover of more than $30 million. Over 700 are foreign-owned multinationals, and they contribute approximately $4.4 billion in corporate tax, which is a large part of Aotearoa New Zealand's corporate tax base.

Advance pricing agreements give customers certainty on tax for an agreed period for specific transfer pricing arrangements. In return, Aotearoa New Zealand gets assurance that these businesses are paying the right tax over the agreed period and about potential future revenue.  There's less need for audits as a result.

As at 30 June 2022, 84 customers had active advance pricing agreements with us, representing tax assured of approximately $490 million a year.

This year, we have increased our focus on tax governance in significant enterprises. We tested a representative sample of enterprises and found that they need to pay more attention to documenting their strategies and tax control frameworks, testing and updating their controls and reporting to their boards. In late 2022, we'll check to see whether significant enterprises have made any improvements.

We've also run targeted compliance campaigns focused on specific sectors and compliance issues. This year, we ran campaigns about tax residency and disclosing offshore income, aimed at ensuring customers meet their international tax obligations in Aotearoa New Zealand. The campaigns targeted almost 7,000 customers and their tax agents, resulting in voluntary disclosures totalling $100 million in omitted income in the last 2 years.

Last updated: 15 Sep 2022
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