Large international companies with New Zealand based offices are often accused of underpaying tax. Globally, governments are moving on these companies to ensure they are paying their fair share of tax. In what could be a New Zealand first, the NBR is reporting that IRD is auditing Microsoft New Zealand.
Microsoft New Zealand, the local unit of the world’s biggest software company, is being audited by the Inland Revenue Dept over transfer pricing, a practice that can be used by multinationals to minimise tax.
The transfer pricing audit covers Microsoft NZ’s accounts for the years 2013 to 2015 and comes as the IRD widens its net to require all foreign-owned firms with annual turnover of more than $30 million to submit an annual basic compliance package which details group structure, financial statements and tax reconciliations. The threshold was previously $60 million in annual sales, involving 600 taxpayer groups of which half were foreign owned and lowering the bar will add a further 300 foreign-owned companies.