Victoria University

Double Tax Agreements and the Arm's Length Principle: the Safe Harbour Ratio in New Zealand's Thin Capitalisation Rules

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Show simple item record Smith, Andrew M C Dunmore, Paul V 2007-11-20T21:48:30Z 2007-11-20T21:48:30Z 2005 2005
dc.description.abstract The opportunities for international tax avoidance through the shifting of profits between jurisdictions is increasing as the world’s economy becomes more integrated. While transfer pricing has been the primary method for multinationals to shift profits, thin capitalisation arrangements have been seen by some multinationals as an alternative as transfer pricing practices have become subject to greater scrutiny by revenue authorities. As a result many OECD members have over the last decade introduced specific rules to deal with thin capitalisation arrangements. New Zealand introduced thin capitalisation rules (along with revised transfer pricing rules) in 1995. At the time of their introduction there was no consideration of any kind as to the relationship between these new thin capitalisation rules and New Zealand’s existing DTA obligations. This omission is notable given that existing DTA obligations could override the new thin capitalisation rules or instead the new rules could potentially override existing DTA obligations. The objective of this article is to review New Zealand’s thin capitalisation rules enacted in 1995 to determine whether they can be considered consistent with the arm’s length principle found in New Zealand’s DTAs. en_NZ
dc.language.iso en_NZ
dc.publisher Victoria University of Wellington en_NZ
dc.relation.ispartofseries No. 14 en_NZ
dc.relation.ispartofseries Working Paper en_NZ
dc.subject Legal jurisdictions en_NZ
dc.subject Tax avoidance en_NZ
dc.subject Multi-nationals en_NZ
dc.subject Global corporates en_NZ
dc.subject Capitalization en_US
dc.title Double Tax Agreements and the Arm's Length Principle: the Safe Harbour Ratio in New Zealand's Thin Capitalisation Rules en_NZ
dc.type Text en_NZ
vuwschema.contributor.unit Centre for Accounting, Governance and Taxation Research en_NZ
vuwschema.contributor.unit School of Accounting and Commercial Law en_NZ
vuwschema.subject.marsden 390118 Taxation Law en_NZ
vuwschema.type.vuw Working or Occasional Paper en_NZ

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