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Income Tax Act 2007

Taxation of certain entities - Taxation of members of certain multinational groups

HP 3: Application of global anti-base erosion model rules

You could also call this:

“Rules to stop people avoiding paying their fair share of tax”

When the government works out how much tax you owe, they use some special rules called the global anti-base erosion model rules. These rules help make sure people pay their fair share of tax. The government modifies these rules in certain ways, which are explained in schedule 25B.

The government uses these modified rules to work out your tax for a fiscal year. They also look at guidance from the OECD, which is a group of countries working together, to help them understand the rules. If there is a conflict between the rules and the guidance, the guidance is used.

The guidance from the OECD includes commentary and other information that helps explain the rules. This guidance is important because it helps the government make sure they are applying the rules correctly. You can find more information about the rules and the guidance on the OECD website, or by looking at section 226G of the Tax Administration Act 1994.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1022075.

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Part H Taxation of certain entities
Taxation of members of certain multinational groups

HP 3Application of global anti-base erosion model rules

  1. This section provides for the application of the global anti-base erosion model rules in determining the obligations of a person under the Inland Revenue Acts.

  2. For the purposes of determining the obligations of a person under the Inland Revenue Acts, the global anti-base erosion model rules are modified in the ways specified in schedule 25B (Items modifying global anti-base erosion model rules).

  3. Subject to any regulations made under section 226G of the Tax Administration Act 1994, the global anti-base erosion model rules apply for a fiscal year—

  4. as modified by subsection (2); and
    1. subject to the modifications made by subsection (2), in accordance with—
      1. the most recent commentary to the global anti-base erosion model rules developed by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (the Inclusive Framework) and published by the OECD before the start of the fiscal year; and
        1. the most recent guidance on the interpretation or administration of the global anti-base erosion model rules issued by the Inclusive Framework and published by the OECD before the start of the fiscal year.

        2. For the purposes of subsection (3)(b), if there is a conflict between the global anti-base erosion model rules and commentary or guidance described in that paragraph, the commentary or guidance prevails.

        3. Subsection (4) does not limit or affect any of the modifications to the global anti-base erosion model rules made by subsection (2).

        Notes
        • Section HP 3: inserted, on , by section 102(1) (and see section 102(2) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).