Taxation (Neutralising Base Erosion and Profit Shifting) Act 2018

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Taxation (Neutralising Base Erosion and Profit Shifting) Act 2018

Public Act
 
2018 No 16
Date of assent
 
27 June 2018
Commencement
 
see section 2

Contents

1Title
2Commencement
3Income Tax Act 2007
4Section BH 1 amended (Double tax agreements)
5New section CH 10B inserted (Interest apportionment: public project debt)
CH 10BInterest apportionment: public project debt
6New heading and section CH 12 inserted
CH 12Income from hybrid mismatch arrangement
7Section CW 59C amended (Life reinsurance outside New Zealand)
8New heading and section CX 64 inserted
CX 64Income from financial instrument
9Section DB 7 amended (Interest: most companies need no nexus with income)
10New heading and section DB 57B inserted
DB 57BMatching of deductions and income from multi-jurisdictional arrangements
11Section DR 3 amended (Life reinsurance outside New Zealand)
12Section EX 20D amended (Adjustment of cost fraction for excessively debt funded CFC)
13Section EX 20E amended (Relative debt-asset ratio for CFC)
14Section EX 44 amended (Five calculation methods)
15Section EX 46 amended (Limits on choice of calculation methods)
16New section EX 47B inserted (Method required for shares subject to certain returning share transfers)
EX 47BMethod required for shares subject to certain returning share transfers
17Section EX 52 amended (Fair dividend rate annual method)
18Section EX 53 amended (Fair dividend rate periodic method)
19New section FE 4B inserted (Meaning of public project asset, public project debt, and public project participant debt)
FE 4BMeaning of public project asset, public project debt, and public project participant debt
20Section FE 5 amended (Thresholds for application of interest apportionment rules)
21Section FE 6 amended (Apportionment of interest by excess debt entity)
22Section FE 7 amended (Apportionment of interest by reporting bank)
23New section FE 7B inserted (Interest on public project debt for certain excess debt entities)
FE 7BInterest on public project debt for certain excess debt entities
24Section FE 8 amended (Measurement dates)
25Section FE 10 amended (Currency)
26Section FE 11 replaced (Temporary increases or decreases in value)
FE 11Disregarded increases or decreases in value
27Section FE 12 amended (Calculation of debt percentages)
28Section FE 14 amended (Consolidation of debts and assets)
29Section FE 15 amended (Total group debt)
30Section FE 16 amended (Total group assets)
31New section FE 16B inserted (Total group non-debt liabilities)
FE 16BTotal group non-debt liabilities
32Section FE 18 amended (Measurement of debts and assets of worldwide group)
33Section FE 21 amended (Banking group’s New Zealand net equity)
34Section FE 23 amended (Banking group’s funding debt)
35New subpart FH inserted (Hybrid and branch mismatches of deductions and income from multi-jurisdictional arrangements)
FH 1Subpart implements OECD recommendations for domestic law
FH 2Order of application of provisions
FH 3Payments under financial instruments producing deduction without income
FH 4Receipts under financial instruments producing deduction without income
FH 5Payments by New Zealand resident or New Zealand deducting branch producing deduction without income
FH 6Receipts from non-resident or foreign deducting branch producing deduction without income
FH 7Payments to person outside New Zealand producing deduction without income
FH 8Expenditure or loss through hybrid entity or foreign deducting branch producing double deduction without double income
FH 9Expenditure or loss of hybrid entity, or non-resident through deducting branch, producing double deduction without double income
FH 10Expenditure or loss of dual resident company producing double deduction without double income
FH 11Residents, or non-residents with deducting branches, having expenditure funding overseas hybrid mismatches
FH 12Offset of mismatch amounts against surplus assessable income
FH 13Election by borrower under financial arrangement
FH 14Irrevocable election by owner of hybrid entity
FH 15Definitions
36New heading and section FZ 8 inserted
FZ 8Transition period for amendments to interest apportionment rules
37Section GB 2 amended (Arrangements involving transfer pricing)
38New section GB 51B inserted (Increases or decreases in value)
GB 51BIncreases or decreases in value
39New heading and section GB 54 inserted
GB 54Arrangements involving establishments
40Section GC 6 amended (Purpose of rules and nature of arrangements)
41Section GC 13 amended (Calculation of arm’s length amounts)
42New heading and sections GC 15 to GC 19 inserted
GC 15Aspects of loan adjusted for application of sections
GC 16Credit rating of borrower: other than insuring or lending person
GC 17Credit rating of borrower: insuring or lending person
GC 18Loan features disregarded by rules for transfer pricing arrangements
GC 19Sections GC 15 to GC 18 and financial arrangements entered before application period
43New section HD 30 inserted (Members of wholly-owned large multinational group)
HD 30Members of wholly-owned large multinational group
44Section IA 2 amended (Tax losses)
45Section LE 1 amended (Tax credits for imputation credits)
46Section RF 2C amended (Meaning of non-resident financial arrangement income)
47New section RF 11C inserted (Interest paid by non-resident companies to non-residents)
RF 11CInterest paid by non-resident companies to non-residents
48Section RM 2 amended (Refunds for overpaid tax)
49Section YA 1 amended (Definitions)
50Section YD 4 amended (Classes of income treated as having New Zealand source)
51New section YD 4B inserted (Meaning of permanent establishment)
YD 4BMeaning of permanent establishment
52Section YD 5 amended (Apportionment of income derived partly in New Zealand)
53New section YD 5B inserted (Attribution of income and expenditure to permanent establishment in New Zealand)
YD 5BAttribution of income and expenditure to permanent establishment in New Zealand
54New schedule 23 inserted (Meaning of permanent establishment)
55Tax Administration Act 1994
56Section 17 amended (Information to be furnished on request of Commissioner)
57New section 21BA inserted (Information required to be provided by large multinational group)
21BAInformation required to be provided by large multinational group
58New section 78G inserted (Country-by-country report from large multinational group)
78GCountry-by-country report from large multinational group
59New section 139AB inserted (Penalty for member of large multinational group failing to provide information)
139ABPenalty for member of large multinational group failing to provide information
60New section 142GB inserted (Due date for payment of penalty by member of large multinational group)
142GBDue date for payment of penalty by member of large multinational group
Legislative history
Administrative information

The Parliament of New Zealand enacts as follows: