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14 - Policy report: BEPS Cabinet papers

Document number 14
Date 13 July 2017
Type Policy report
Title

BEPS Cabinet papers

Description

Covering report for the three BEPS Cabinet papers: strengthening our interest limitation rules, transfer pricing and permanent establishment avoidance, and addressing hybrid mismatch arrangements.

Note: This document includes the Cabinet papers and signed regulatory impact assessments – these are also listed individually (documents #15–#20).

Report number: IR2017/429, T2017/1901

Downloads

PDF (4.5 MB; 100 pages)
DOCX (165 KB; 3 pages; covering report only; see documents #15–#20 for Cabinet papers and regulatory impact assessments)

Contents

Tax policy report: BEPS Cabinet papers


Date: 13 July 2017 Priority: Medium
Security level: In Confidence Report no: T2017/1901
IR2017/429

Action sought

  Action sought Deadline
Minister of Finance Authorise the attached Cabinet papers for lodgement with Cabinet Office. 10am, Thursday 20 July 2017
Minister of Revenue Authorise the attached Cabinet papers for lodgement with Cabinet Office. 10am, Thursday 20 July 2017

Contact for telephone discussion (if required)

Name Position Telephone
Steve Mack Principal Advisor, The Treasury [Withheld under section 9(2)(a) of the Official Information Act 1982]
Carmel Peters Policy Manager, Inland Revenue
Paul Kilford Policy Manager, Inland Revenue

 

13 July 2017

Minister of Finance
Minister of Revenue

Policy report: BEPS Cabinet papers


1. This report recommends that you authorise the 3 attached Cabinet papers for lodgement with the Cabinet Office by 10am Thursday 20 July 2017 for the Cabinet Economic Growth and Infrastructure Committee (EGI) to consider at its meeting on 26 July 2017.

2. The three attached papers are:

  • BEPS – strengthening our interest limitation rules. This paper contains measures to limit the ability of multinationals to use interest payments to shift their New Zealand profits offshore.
  • BEPS – transfer pricing and permanent establishment avoidance. This paper contains measures to strengthen our transfer pricing rules, counter permanent establishment avoidance and help Inland Revenue deal with uncooperative multinationals.
  • BEPS – addressing hybrid mismatch arrangements. This paper proposes measures to remove the tax advantages of hybrid mismatch arrangements.

3. These 3 papers form a comprehensive package of measures to address base erosion and profit shifting (BEPS). We reported to you on these measures on 22 June 2017 (T2017/1576, IR2017/325; T2017/1577, IR 2017/330; T2017/1578, IR2017/329; T2017/1604, IR2017/353).

4. We also reported to you on another related Cabinet paper on Thursday 6 July 2017 (T2017/1847, IR2017/410) called Tax measures to prevent base erosion and profit shifting. This covering Cabinet paper summarises the background to the 3 attached papers, highlights the most important aspects of the proposed measures, and discusses matters common to all three papers (including application dates, publicity, and financial implications). We recommend that all four Cabinet papers be lodged together with the Cabinet Office.

Next steps

5. The following table sets out the next steps for the measures set out in the Cabinet papers.

Date Milestone/action
10am, Thursday 20 July Lodge four BEPS Cabinet papers with Cabinet Office (if you agree with their contents)
Wednesday 26 July 2017 EGI
Monday 31 July 2017 Cabinet
August – October 2017 Further consultation on the measures
14 December 2017 BEPS bill containing the measures introduced
30 June 2018 BEPS bill to be passed by this date
1 July 2018 Application date for most measures

Recommended action

We recommend that you:

(a) Note that we reported to you on 6 July 2017 on a covering Cabinet paper called Tax measures to prevent base erosion and profit shifting which summarises the background to the 3 attached papers, highlights the most important aspects of the proposed measures, and discusses matters common to all three papers (including application dates, publicity, and financial implications).

Noted   Noted

(b) Authorise the attached 3 Cabinet papers for lodgement with the Cabinet Office (and their attached regulatory impact assessments), along with the covering Cabinet paper referred to above, by 10am Thursday 20 July 2017 for the Cabinet Economic Growth and Infrastructure Committee to consider at its meeting on 26 July 2017.

Authorised   Authorised

 

Steve Mack
Principal Advisor
Tax Strategy
The Treasury

Carmel Peters
Policy Manager
Policy and Strategy
Inland Revenue

Steven Joyce
Minister of Finance

Hon Judith Collins
Minister of Revenue