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Swiss tax agreement tightens net

· August 08, 2019

Opportunities to dodge tax are shrinking with the completion of a new tax agreement with Switzerland, Revenue Minister Stuart Nash announced today.

Mr Nash and the Swiss Ambassador David Vogelsanger have today signed documents to update the double tax agreement (DTA). The previous DTA was signed in 1980.

“Double tax agreements are good for business because they reduce barriers to trade and cross-border investment, eliminate double taxation, and reduce withholding taxes,” Mr Nash says.

“DTAs are also an extremely valuable tool to crack down on tax avoidance and tax evasion. They establish a formal means to exchange information between two countries.

“New Zealand has 40 DTAs. It is easier to update them since the OECD and G20 nations increased the focus on multinationals who often seem to not pay tax anywhere in the world. This led to the base erosion and profit shifting (BEPS) initiative which the coalition government ratified last year. The DTA with Switzerland includes BEPS measures.

“The new agreement includes provisions to reduce multinational tax avoidance by incorporating base erosion and profit shifting measures.

“In the year to March 2018, total New Zealand investment in Switzerland was approximately $246 million, while total Swiss investment in New Zealand was $2,290 million.

“Meanwhile work is also progressing on a protocol to the existing Tax Information Exchange Agreement with Guernsey and this should be concluded in the near future.

“With the work we’ve already done and the steady ongoing work to update our DTAs, the anti-BEPS net is closing ever tighter. The opportunities to dodge tax are vanishing,” says Mr Nash.

The text of the agreement with Switzerland can be found at http://taxpolicy.ird.govt.nz/tax-treaties/switzerland

Maintaining momentum for small business innovation

· August 02, 2019

Small Business Minister Stuart Nash says the report of the Small Business Council will help maintain the momentum for innovation and improvements in the sector.

Mr Nash has thanked the members of the Small Business Council (SBC) who this week handed over their report, Empowering small businesses to aspire, succeed and thrive.

“I appointed the members of the SBC in August 2018 with one primary objective. I asked them to help government develop a strategy to drive performance and innovation for small and medium enterprises,” Mr Nash says.

“While the SBC has been working on its report, the government has kept up momentum on business-friendly initiatives.

“We are offering new incentives for research and development; taking action on unfair commercial practices; improving access to venture capital; encouraging innovative use of technology like e-invoicing; bringing greater fairness to the tax system especially where multinationals compete with local firms; and improving infrastructure in the regions.

“These initiatives that are already underway will create a productive, sustainable and inclusive economy that will benefit all New Zealanders, especially small business owners and people employed in small businesses.

“I look forward to now considering the SBC report, which contains 20 recommendations to complement our work programme.

“I will take the time to talk to colleagues across government about how best to drive progress and use the SBC’s work to support the Prime Minister’s Business Advisory Council, which includes SMEs as a priority.

“As well as developing a small business strategy the SBC also provided advice on support structures for the sector, methods of defining and capturing data on small business, and ways to continue the work programme initiated by Council members. 

“I would like to thank the SBC for its hard work over the past year.  Its recommendations are wide-ranging and touch on the work of many different portfolios and agencies.

“Small businesses are a vital part of our economy and way of life. They make up 97 per cent of all businesses and employ more than 600,000 people. By taking steps to drive performance and innovation, we can make real progress for the people who run small businesses and the communities they contribute to,” Mr Nash says.

The SBC report and the government response are expected to be released in the next couple of months.

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