WELLINGTON: New Zealand’s tax policies are seen as relatively straight forward, consistent and predictable compared to other countries in the region, according to a Deloitte survey released yesterday.
The third edition of Deloitte’s Asia Pacific Tax Complexity Survey, entitled Shifting sands: risk and reform in uncertain times, highlights key tax trends facing businesses operating in the region. It surveyed 331 executives across Asia Pacific, including 87 whose companies have operations in New Zealand.
The 2017 findings show predictability, followed closely by consistency, of tax regimes is the most important factor for businesses when deciding to enter or exit a market in Asia Pacific.
The report concludes that in the current uncertain tax landscape, tax regimes in the region remain complex and predictability and consistency is elusive. This is especially the case in China and India, which have the most complicated requirements of all jurisdictions in Asia Pacific, according to survey respondents. In 2010 complexity was the most important factor for surveyed tax executives in the region, and in 2014 consistency was considered most important.
Deloitte Tax Partner Patrick McCalman says that this progression from complexity to consistency to predictability may be explained by tax regimes in the region maturing over the past 10 years.
“As tax regimes have matured, tax complexity has improved and corporates now seek tax predictability to ensure smooth tax management,” says McCalman.
McCalman adds that the results represent both an opportunity and a challenge for New Zealand.
“The survey clearly shows New Zealand has a stable tax system. And along with Australia and Singapore, we are perceived to have one of the fairest tax systems in the region with taxpayers enjoying generally good relationships with our tax authority,” says McCalman.
“Being seen in the region as being a country that, from a tax perspective, is relatively easy to do business in certainly provides an opportunity to encourage more inward investment here. But at the same time the fact that tax regimes in Asia Pacific continue to be complex with varying levels of predictability and consistency adds risk and uncertainty to businesses in the region and will be a challenge to Kiwi companies looking to invest offshore.”
