NZ part of global push against tax avoidance

Bill English wants tax equity. Photo / NZME

There is broad global support for moves to curb international tax avoidance, Finance Minister Bill English said on the sidelines of the G20 Leaders' Summit in Brisbane.

Image 1 of 14: US president Barack Obama, centre, with European leaders discussing transatlantic trade and the situation in Ukraine. Photo / AP

Cracking down on tax avoidance is one of the key agenda items at this weekend's summit, where New Zealand is an invited guest. The G20 countries make up 85 per cent of global economic activity and 75 per cent of global trade.

"Of all the multilateral initiatives, the one to do with the international taxation of corporations and individuals has made more progress than most and that's because it has got such broad political support," English said. "Both governments and voters want to see particularly the new generation of tech-oriented companies paying their fair share of tax and [also] individuals."

Tech companies including Amazon, Microsoft, Google and Apple have been criticised for booking profits in low-tax jurisdictions. European Commission president Jean-Claude Juncker has been fending off criticism at the weekend summit over his role as former Luxembourg prime minister in turning the country into a tax haven.

"It has become pretty much unacceptable in the developed world at least to be running a tax haven that undermines other people's tax bases," English said, referring to the controversy over Luxembourg.

Fletcher Building chief executive Mark Adamson, who is representing New Zealand on the sidelines of the G20 meeting as part of the B20 business group, said he expected a breakthrough on tax, following talks with Australian Treasurer Joe Hockey and Prime Minister Tony Abbott.

"They were quite hopeful that the base erosion, as they call it, would be resolved by, in principal, taxing earnings where they are accrued rather than multinationals moving them around the world for tax advantage," Adamson said. "I think there's going to be a breakthrough this weekend."

New Zealand expected to be part of an international plan to combat tax avoidance being developed by the OECD, English said. The first steps would be in 2016/17.

"Multinational initiatives usually struggle to get momentum, this one is really moving along even though it's quite a difficult area."

English said tax payments needed to be transparent.

"If a company is present in New Zealand, we want to be able to understand whether and where they are paying tax elsewhere, so I think the transparency is the first step."