02 - Policy report: Cabinet paper - Foreign hybrid entity double deductions and BEPS reforms
| Document number | 02 |
|---|---|
| Date | 6 April 2017 |
| Type | Policy report |
| Title | Cabinet paper - Foreign hybrid entity double deductions and BEPS reforms |
| Description | Covering report for Cabinet paper (document #03). Report number: IR2017/237, T2017/949 |
| Downloads | |
| Contents |
Tax policy report: Cabinet paper - Foreign hybrid entity double deductions and BEPS reforms
| Date: | 6 April 2017 | Priority: | High |
| Security level: | Sensitive - Budget | Report no: | T2017/949 IR2017/237 |
Action sought
| Action sought | Deadline | |
|---|---|---|
| Minister of Finance | Agree to the recommendations of this report. Authorise the lodgement of the attached Cabinet paper. |
Either:
|
| Minister of Revenue | Agree to the recommendations of this report. Authorise the lodgement of the attached Cabinet paper. |
Either:
|
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] | |
| Paul Kilford | Policy Manager, Inland Revenue | ||
6 April 2017
Minister of Finance
Minister of Revenue
Cabinet paper - foreign hybrid entity double deductions and BEPS reforms
1. This report asks you to refer the attached Cabinet paper to Cabinet Office so that it may be considered either by:
- The Economic Growth and Infrastructure Committee (EGI) at its meeting on 12 April 2017; or
- Cabinet at its meeting on 18 April 2017.
2. The paper proposes that Cabinet:
- Agree to tax law changes to restrict the ability of New Zealand businesses to use double deductions of foreign hybrid entities, particularly Australian Limited Partnerships, to reduce their tax liabilities in New Zealand; and
- Note the progression of proposals contained in three BEPS discussion documents (Addressing hybrid mismatch arrangements, BEPS – transfer pricing and permanent establishment avoidance, and BEPS - strengthening our interest limitation rules), subject to modification in consultation.
3. If Cabinet agrees to these recommendations, the Budget 2017 revenue forecasts will be adjusted by $100 million per year from 2019/20 (with $50 million forecast in the preceding year).
Recommended action
We recommend that you:
Authorise lodgement of the attached Cabinet paper either:
a. by 10:00 am, Wednesday 12 April 2017 for Cabinet on 18 April 2017.
Authorised/Not authorised Authorised/Not authorised
OR
b. as soon as possible as a late paper for EGI on 12 April 2017.
Authorised/Not authorised Authorised/Not authorised
Steve Mack
Principal Advisor
The Treasury
Paul Kilford
Policy Manager
Policy and Strategy
Inland Revenue
Steven Joyce
Minister of Finance
Hon Judith Collins
Minister of Revenue