Annex 3

Relationship between the OECD’s action plan and New Zealand’s existing tax rules

BEPS technique OECD action item Corresponding New Zealand tax rules
Excessive debt funding or interest deductions 3 Thin-capitalisation rules

Transfer pricing rules
Shifting mobile income or assets offshore 4 Rules for controlled foreign companies and foreign investment funds
Manipulating prices in related-party transactions 8–10 Transfer pricing rules
Hybrid mismatches

(These occur because countries have different tax rules for distinguishing between debt and shares or companies and partnerships)
2 Taxing/reclassifying dividends that are equivalent to debt

Stapled stock rules

Double tax agreements with fiscally transparent entity provisions
Artificial business structures that enable economic activity to be carried out with no taxable presence 7 Source rules and permanent establishment
Structuring into lower withholding tax rates on cross-border payments of dividends, interest and royalties. 6 NRWT rules

Double tax agreements with anti-treaty shopping rules