APA & MAP COUNTRY GUIDE 2018 - NEW ZEALAND - New paths ahead for international tax Controversy - DLA Piper
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APA & MAP COUNTRY GUIDE 2018 – NEW ZEALAND New paths ahead for international tax Controversy
NEW ZEALAND
APA PROGRAM
KEY FEATURES
Competent Inland Revenue Department (‘IRD’)
authority
Relevant Part 5A of the Tax Administration Act; and general guidance
provisions available on the IRD’s website.
Types of APAs Unilateral, bilateral, and multilateral APAs are available under the
available private binding rulings regime.
Acceptance No specific guidance.
criteria
Key timing No specific guidance.
requests,
deadlines
APA term limits There is no specific guidance for APA term limits. In practice
there is usually a maximum term of five years.
Filing fee A flat fee of NZD 322 (approx. USD 226) is payable to the IRD.
Any overseas travel is required for the completion of an APA, and
the IRD will seek to recover out of pocket expenses on an actual and
reasonable basis from the Taxpayer. An estimate of such costs will be
provided to the Taxpayer prior to the travel being undertaken.
Rollback No specific guidance.
availability
Collateral issues Applications from Taxpayers under investigation by the IRD for
tax issues will be refused.
PRE-FILING REQUIREMENTS
Overview Taxpayers intending to apply for an APA should contact for a pre-
application meeting with a Principal Advisor (Transfer Pricing) to
discuss the proposal informally. During the meeting the following
will be discussed and presented for consideration:
■■ an overview of the business operations;
■■ background information on the foreign entities involved in the
transactions intended to be covered by the APA; and
■■ TP method intended to be applied.
Anonymous pre- Anonymous pre-filing is not available.
filing availability
02 | APA & MAP Country Guide 2018 – New Zealand
NEW ZEALAND (cont’d)
APPLICATION REQUIREMENTS
Content of After a successful pre-filing meeting the APA application will
application be formalised and submitted for consideration. This application
should include:
■■ identification of the test party;
■■ analysis of key profit drivers and value added;
■■ a full functional analysis;
■■ the choice of TP method;
■■ a study of comparables;
■■ proposed application of methodology and comparables; and
■■ copies of all inter-company agreements.
Site visits and interviews may be required during the application
review stage to inspect the actual operations of the relevant
associated parties, especially where valuable intangibles are in
issue and a residual profit split methodology is proposed.
Language The documentation should be submitted in English.
SME provisions No specific guidance.
OTHER PROCEDURAL CONSIDERATIONS
General The IRD follows a standard pre-filing, application and monitoring
process. There are no unique procedural aspects.
Monitoring & Taxpayers are required to provide an Annual Compliance Report
compliance at the time of filing their annual returns and indicate whether or
not they have adhered to the terms of the APA.
Renewal Taxpayers may request to renew an existing APA following the
procedure same process as it did to initiate the existing APA.
www.dlapiper.com | 03
NEW ZEALAND (cont’d)
MAP PROGRAM
KEY FEATURES
Competent Inland Revenue Department (‘IRD’)
authority
Relevant There are no specific provisions for the MAP procedure in
provisions domestic law. Taxpayers must rely on the MAP provisions under
DTTs, and informal guidance published on the IRD website.
Acceptance Taxpayers may request a MAP if taxation has or is likely to occur
criteria that is not in accordance with the provisions of a DTT to which
New Zealand is signatory.
Key timing Most of New Zealand’s DTTs permit Taxpayers to present a case
requests, to the IRD within three years from the first notification to the
deadlines Taxpayer of the actions giving rise to taxation not in accordance
with the DTT. However, time limits may vary, and the relevant
DTT should be consulted for the applicable time limit.
04 | APA & MAP Country Guide 2018 – New Zealand
NEW ZEALAND (cont’d)
APPLICATION REQUIREMENTS
Content of Taxpayers can facilitate the MAP by ensuring the tax authorities
application of both contracting states receive complete, accurate and timely
information. Depending on what may be determined as a result
of a pre-filing conference, the following information should be
included in a taxpayer’s MAP submission:
■■ name, address and IRD number of the Taxpayer;
■■ the provision of the specific article of the DTT which the
taxpayer considers is not being applied correctly by either one
or both contracting states;
■■ the relevant facts of the case including any documentation
substantiating these facts, the period involved and the amounts
involved;
■■ an analysis of the issues involved supported by relevant
documentation;
■■ where a request has also been made to the tax authority of the
other contracting state, a copy of that submission;
■■ if the issue has been previously dealt with by some other
means (such as an advance ruling, APA or settlement
agreement), then a copy of any relevant ruling or agreement;
■■ if the MAP request has been submitted to another tax
authority under another instrument that provides for a
mechanism to resolve treaty-related disputes, then a copy of
that submission (including all related documentation) unless
the content of both MAP submissions are exactly the same;
■■ if the MAP request is “protective” (ie submitted to ensure
compliance with a time frame provided under the relevant
DTT but not to be examined until further notification from the
taxpayer to do so), then a clear statement to this effect; and
■■ a final statement confirming that all information provided in
the MAP request is accurate and additional information will be
provided in a timely manner if required by the tax authority.
www.dlapiper.com | 05NEW ZEALAND (cont’d)
OTHER PROCEDURAL CONSIDERATIONS
Interaction Taxpayers can initiate the MAP and the domestic disputes process
with domestic simultaneously. Access to MAP is not limited with respect to
proceedings matters resolved through the Disputes Review Unit. Requesting
assistance to resolve a dispute under the MAP does not preclude
any domestic action. A request for assistance under the MAP can
be made even if an audit settlement has been agreed domestically.
Furthermore, the IRD is legally bound to follow a domestic
court decision in MAP cases, but is willing to enter into dialogue
with other relevant foreign jurisdiction’s competent authorities
to explain the New Zealand position in any case where double
taxation may have arisen as a consequence.
Arbitration No specific guidance.
STATISTICS
APA As at 30 June 2017, 170 APAs had been completed by the IRD.
MAP New Zealand had a total of 15 active MAP applications as of
31 December 2016. The average time needed to close MAP
cases is 22 months for transfer pricing cases, and 19 months for
other cases.
06 | APA & MAP Country Guide 2018 – New ZealandNEW ZEALAND (cont’d)
DOUBLE TAXATION TREATY NETWORK
The following treaties include MAP provisions which are the basis for bilateral and
multilateral APA negotiations:
Australia(I) India Samoa(IV)
Austria Indonesia Singapore
Belgium Ireland South Africa
British Virgin Islands (IV)
Italy Spain
Canada(IV) Japan(I), (IV), (VI) Sweden
Chile Korea (Republic of) Switzerland
China Malaysia Taipei(III)
Czech Republic Mexico Thailand
Denmark Netherlands Turkey
Fiji Norway United Arab Emirates
Finland Papua New Guinea (IV)
United Kingdom
France Philippines United States
Germany Poland Vietnam(IV)
Hong Kong Russia
NOTES
I denotes treaties with MAP arbitration provisions.
II denotes treaties with the USSR that remain applicable until a separate tax treaty is concluded.
III denotes treaties between the countries’ representative office in Taipei and the Taipei Economic and
Cultural Office in the relevant country.
IV denotes treaties that became effective within the last five years.
V denotes treaties that are awaiting ratification.
VI denotes MAP provisions identical to para 3, art 25 of the OECD Model Convention with respect to
Taxes on Income and on Capital.
VII arbitration is to be conducted under the statutes of the ECJ.
VIII arbitration is to be conducted under the statutes of the ICJ.
www.dlapiper.com | 07DLA PIPER CONTACTS
Joel Cooper Randall Fox
Partner, Co-Head International Partner, Co-Head of
Transfer Pricing International Transfer Pricing
T +44 207 796 6929 T +44 207 796 6928
M +44 773 829 5470 M +44 773 8295 935
joel.cooper@dlapiper.com randall.fox@dlapiper.com
NEW ZEALAND
Lynette Smith
Special Counsel
T +64 9 300 3812
lynette.smith@dlapiper.co.nz
08 | APA & MAP Country Guide 2018 – New Zealandwww.dlapiper.com DLA Piper is a global law firm operating through various separate and distinct legal entities Further details of these entities can be found at www.dlapiper.com. This publication is intended as a general overview and discussion of the subjects dealt with, and does not create a lawyer-client relationship. It is not intended to be, and should not be used as, a substitute for taking legal advice in any specific situation. DLA Piper will accept no responsibility for any actions taken or not taken on the basis of this publication. This may qualify as “Lawyer Advertising” requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome. Copyright © 2018 DLA Piper. All rights reserved. | AUG18 | 3318123
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