Woodhouse taking advice on tax rules

Immigration Minister Michael Woodhouse. Photo / Mark Mitchell

Revenue Minister Michael Woodhouse is getting advice on Australian and British tax laws that target multi-national companies.

However, he told Parliament this afternoon that he is satisfied New Zealand already has rules in place dealing with the same issues.

A major Herald investigation this month has found the 20 multinational companies most aggressive in shifting profits out of New Zealand overall paid virtually no income tax, despite recording nearly $10 billion in annual sales to Kiwi consumers.

The investigation was raised during today's question time by Green Party co-leader James Shaw.

Woodhouse, during the exchange with Shaw, didn't accept there were "deficiencies" in New Zealand's tax rules that hadn't been addressed.

However, the minister did say he had some "sympathy" for the view that what multi-national companies pay in tax did not look right or fair.

"But what is considered unfair is multi-nationals not paying tax anywhere in the world and for that reason this is a global issue that requires a global response. I think the OECD is the best place in which to have that analysis," Woodhouse said.

Asked by Shaw whether he would introduce new laws to better "police" multi-national companies and to collect a "fair share of tax revenue" from them, Woodhouse replied:

"The Member is referring to laws that have been passed both in the UK and Australia on what is known as diverted profits tax which disallows arrangements where foreign companies exploit permanent establishment rules and contrive tax advantage by having deductions that lack economic substance. I am getting some advice about that but I am satisfied in the interim that we already have those sort of rules in the Income Tax Act."