New Zealand: local rules

New Zealand's transfer pricing rules are in subpart GC of the Income Tax Act 2007 (ss GC 6 to GC 19). When the price in a cross-border deal between associated persons lowers a person's New Zealand net income, an arm's length amount is used instead (GC 6(1), GC 7 and GC 8). Since income years starting on or after 1 July 2018 the rules must be applied consistently with the OECD transfer pricing guidelines (GC 6(1B)). The same 2018 BEPS law added the accurate delineation test and the power to treat a deal as absent or different (GC 13(1B) and (1C)), and the restricted pricing rules for loans from foreign related lenders (GC 15 to GC 19). The Commissioner can amend an assessment for transfer pricing up to 7 tax years after the return year if an audit is notified within 4 tax years (GC 13(6)).

There is no legal duty to file a master file, a local file or any transfer pricing form with the tax return. The system is self assessment, so the company must keep records that support its prices, and Inland Revenue says the burden of proof sits with the taxpayer. Inland Revenue expects documents that follow OECD Chapter V (master file and local file) and has added no extra content rules. Documents must be given on request, for example in a risk review or audit. Foreign-owned groups with turnover over NZ$30m are generally sent an International Questionnaire each year (the 2025 income year form was due 29 April 2026), and large multinational groups can be given an information demand with a 3 month response time (TAA s 17G).

Section GC 13(2) names five methods: comparable uncontrolled price, resale price, cost plus, transactional profit split and transactional net margin. One method or a mix can be used, whichever gives the most reliable result. The choice must consider comparability, data quality, assumptions and sensitivity (GC 13(3)). The statute sets no ranking and no range rule. Inland Revenue lets qualifying low value-adding services be charged at cost plus 5% without benchmarking, and treats a rate of 2.25% over the base indicator as broadly arm's length for related-party loans up to NZ$10m in total until 30 June 2030. Loans from a foreign related lender follow the restricted rules: the borrower's credit rating is set by GC 16 or GC 17 and some loan features are ignored under GC 18 if related debt is NZ$10m or more.

No special transfer pricing fine exists. The normal shortfall penalties apply to the extra tax: 20% for not taking reasonable care (TAA s 141A) or for an unacceptable tax position above NZ$50,000 and 1% of total tax (s 141B), 40% for gross carelessness (s 141C), 100% for an abusive position (s 141D) and 150% for evasion (s 141E). Inland Revenue says that if documentation is inadequate and it proposes an adjustment, penalties will most likely apply, and brushing over material related-party deals could bring the 40% penalty. Late payment penalties are 1% plus 4%, then 1% a month (s 139B). A CbC report failure carries a penalty of up to NZ$100,000 (s 139AAB), and so does failing to register for or report under the Pillar Two rules (s 139ABB). A late top-up tax return costs NZ$500 (s 139A(3B)).

New Zealand enacted the GloBE rules in 2024. The income inclusion rule (IIR) and the undertaxed profits rule (UTPR) apply to fiscal years beginning on or after 1 January 2025. A domestic income inclusion rule for New Zealand-headquartered groups applies from fiscal years beginning on or after 1 January 2026. There is no qualified domestic top-up tax. One designated New Zealand entity registers in myIR within 6 months after the end of the first in-scope fiscal year (TAA s 78H). The GIR is due 18 months after the first year and 15 months after later years, unless it is filed abroad and a notice is given (s 78I). The top-up tax return and the payment are due 20 months after the first year and 16 months after later years (s 78J and ITA s HP 2).

A New Zealand-resident ultimate owner of a group with revenue of EUR 750m or more (about NZ$1.3bn) files a CbC report in myIR within 12 months after the period end (TAA s 78G). No separate CbC notification and no local filing for foreign-parented groups was found in the law. Unilateral APAs are possible as binding rulings, and bilateral APAs exist with 10 treaty partners. Thin capitalisation rules are in subpart FE. A company with a 31 March year end files its return by 7 July, or by 31 March of the next year with a tax agent extension, and pays terminal tax on 7 February, or 7 April with the agent extension. Under Legislation Act 2019 s 55, a deadline on a day that is not a working day moves to the next working day, and 25 December to 2 January are not working days.