New Zealand: Consultation on implementation of Pillar Two rules

Feedback requested on whether and how to implement the Pillar Two rules

Feedback requested on whether and how to implement the Pillar Two rules

Inland Revenue released a consultation document [PDF 1.6 MB] requesting feedback on whether and how New Zealand might implement the Pillar Two rules of the OECD/G20 Inclusive Framework’s proposed solution to the tax challenges arising from digitalisation of the economy. The rules under Pillar Two would establish a global minimum tax of 15% for multinational enterprises with a turnover of at least €750 million, effective from 2023.

The consultation document specifically requests feedback on the following issues:

  • Whether New Zealand needs to adopt the global anti-base erosion (GloBE) rules, assuming that a critical mass of other countries also does so
  • Whether New Zealand needs to apply the income inclusion rule (IIR) to New Zealand source income of in-scope multinationals, by way of a domestic minimum top-up tax
  • When any adoption should be effective, particularly in relation to the IIR
  • How best to translate the rules into New Zealand law
  • What areas of uncertainty there may be in applying the rules to New Zealand tax law, and how to resolve these
  • Whether tax paid to the New Zealand government under the rules should give rise to imputation credits
  • Administrative aspects, for instance return filing and timing of payments

Comments are due 1 July 2022.


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