New Zealand - Corporate Tax Governance

As part of Inland Revenue’s publication entitled ‘Compliance Focus for Multinational Enterprises’ launched late last year, we included a tax governance checklist for boards of directors of New Zealand companies. We also re-endorsed OECD guidance on corporate tax governance.

This seems to have had the desired effect, with strong feedback from tax advisers recommending that the checklist be adopted as best practice for all large New Zealand companies. Inland Revenue is keen to see tax compliance on boardroom agendas with company directors not only having an understanding of tax risk but also taking responsibility for oversight. The Compliance Focus publication makes it clear that ‘compliance begins with the right tone from the top being set by directors and senior management’.

Being able to demonstrate that a strong tax control framework exists provides a tax authority with confidence that the right amount of tax is being paid. As part of our annual international risk assessment process, we will be following up multinationals later this year as to whether they have a tax governance policy or framework specifically documented for New Zealand.