On May 18, 2023 the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Bill, which amongst others will implement the OECD Global Anti-Base Erosion (GloBE) rules in New Zealand, was introduced into New Zealand’s Parliament. New Zealand intends to implement the Income Inclusion Rule (IIR), a Domestic Income Inclusion Rule (DIIR) and an Undertaxed Profits Rule (UTPR). In order to implement the GloBE rules the Bill contains the several amendments to the New Zealand Income Tax Act 2007.


The proposed Applied GloBE rules have implications for both MNEs headquartered inside New Zealand and those outside New Zealand. For MNEs headquartered in New Zealand, or with a constituent entity (including a branch) located in New Zealand, the proposed Applied GloBE rules require the MNE to pay Multinational Top-Up Tax to Inland Revenue for:

  • Foreign operations under the Income Inclusion Rule (IIR), 4 which applies when a New Zealand MNE earns the undertaxed income in another country (see Chapter 2 of the Model Rules).
  • New Zealand operations under the Domestic Income Inclusion Rule (DIIR), which applies when a New Zealand-headquartered MNE has undertaxed mobile income in New Zealand (see proposed schedule 25B of the ITA and Chapter 2 of the Model Rules).


MNEs headquartered outside New Zealand could also be subject to a Multinational Top-Up Tax liability if they have an intermediate parent located in New Zealand or a liability under the Undertaxed Profits Rule (UTPR) (see proposed schedule 25B of the ITA and Chapter 2 of the Model Rules).


The proposed regulation-making power would take effect on the day after the date the Bill receives the Royal assent.


The application date for the Applied GloBE rules would be set by Order in Council once the Government determines that a critical mass of countries has adopted the GloBE rules. This would not be earlier than January 1, 2024 for the IIR and January 1, 2025 for the UTPR.


With respect to the Bill New Zealand’s Revenue Minister David Parker said amongst others the following:

The bill commits New Zealand to an OECD-led global tax initiative aimed at ensuring large multinationals pay a minimum tax rate of 15 per cent in participating countries. The aim is to stop a global “race to the bottom” among countries trying to entice the mobile capital of multinationals by slashing their tax rates.

The GloBE tax measure is expected to raise only minimal revenue in New Zealand, where we have a 28 per cent corporate tax rate and a relatively robust international tax regime. This is about our country playing its part in this worthy global effort.”

It also reduces the overseas compliance costs of New Zealand-based multinationals. When asked, they said they prefer to deal with Inland Revenue alone, rather than multiple overseas tax jurisdictions.


Here you can find the text of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Bill as introduced into New Zealand’s parliament on May 18, 2023.


Here you can find the Bill Commentary regarding the Taxation (Annual Rates for 2023 – 24, Multinational Tax, and Remedial Matters) Bill.



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