1. Tax System—Multinational EnterprisesMELISSA LEE (National) to the Minister of FinanceORAL QUESTIONSQUESTIONS TO MINISTERSTax System—Multinational Enterprises1. MELISSA LEE (National) to the Minister of Finance: What decisions has the Government made to ensure multinational companies pay their fair share of tax?Hon STEVEN JOYCE (Minister of Finance): Today my colleague and the excellent Minister of Revenue Judith Collins and I announced the Government's final decision on proposals to address base erosion and profit shifting also known as BEPS. New Zealand has been working alongside the OECD on the global response to ensure multinationals are taxed fairly no matter where they operate. Our new initiatives will significantly strengthen our tax rules and align them with the changes being made in Australia and in other OECD countries. The Government has ensured we will tackle multinational tax without reducing the attractiveness of New Zealand as an investment destination.Melissa Lee: What specific changes affecting multinational companies is this Government making?Hon STEVEN JOYCE: Our package of initiatives will stop foreign parent companies charging subsidiaries high interest rates to reduce their taxable profits in New Zealand stop multinationals using artificial arrangements to avoid having a taxable presence in New Zealand and make it much easier for the Inland Revenue Department to investigate uncooperative companies. It is very important that every company operating in New Zealand pays its fair share of tax and that we avoid the situation where companies do not pay tax anywhere in the world.Melissa Lee: How much extra revenue will result from these changes?Hon STEVEN JOYCE: The changes announced this morning will result in an estimated additional $200 million a year in tax being paid by multinational companies. This is made up of the $100 million per year already booked through Budget 2017. [Interruption]Mr SPEAKER: Order! [Interruption] Order! We are not putting up with that level of interjection and particularly from one person immediately to my left.Hon STEVEN JOYCE: Mr Speaker I think it is his relief at keeping his job. The changes are made up of the $100 million per year already booked through Budget 2017 and an additional $100 million resulting from today's announcements. It also builds on the work we have already done to impose GST on imported services and the stronger non-resident withholding tax rules that were introduced last year. Taken together the Government's actions on multinational companies are estimated to result in revenue of $300 million per year—$100 million more than is already in the Budget track. Grant Robertson: Why after 9 years of being in Government and 5 years after he was warned exactly about multinational tax avoidance does he think he will have any credibility with this announcement—and maybe he should have let Judith Collins make it instead of trying to take credit for it?Hon STEVEN JOYCE: In answer to the second part of the question the Minister and I work as a team on many matters including on this one. Can I tell the member that—and he might want to listen here because he might learn something—there is a thing known as the OECD and the countries in the OECD agreed to work together to make sure that multinationals pay tax across all the jurisdictions otherwise the actions of any individual country would not make any difference at all. So we have signed the multilateral treaty and in fact Minister Collins went to Paris to sign that treaty so that New Zealand actually was able to join with the other countries and collect this revenue.Melissa Lee: How does today's announcement on multinational tax fit into the Government's strategy of making business easier in New Zealand?Hon STEVEN JOYCE: New Zealand is a great place to do business and our broad based - low rate tax system continues to perform very well overall; in fact it is very very important for encouraging people to create jobs in this country. It is important that we do not become complacent and that we keep taking additional steps to ensure that our tax system remains fair to everybody operating in this country. Our strong economic plan gives businesses the confidence to invest and expand and grow jobs and by ensuring that all companies are taxed fairly those that come to New Zealand and grow operations here know they will get a fair deal.