New Zealand tax legislation sets out five methods (fields 39 to 43 below) to calculate an arm’s length consideration for setting transfer
prices between legal entities.
e determination of income for branches is governed by section YD5 of the Income Tax Act 2007. However, the provisions of this
legislation are subject to the business profits article of the many double tax agreements New Zealand has entered into.
In general, best practice for core dealings is to look at the New Zealand business activity and use the five methods applicable to
transactions between legal entities. In the “Supplied” columns below, record the value of dealings/transactions where prices have
been confirmed by a method (the “tested dealings/transactions”). Where more than one method was used, allocate the value to the
predominant method.
Field 44 is for the value of untested dealings/transactions. e totals at field 45 must equal the totals at field 38.
Dealings/transactions
Supplied to the branch
NZ$000
Supplied by the branch
NZ$000
39 Comparable uncontrolled price method
40 Resale price method
41 Cost plus method
42 Transactional profit split method
43 Transactional net margin method
44 Untested dealings/transactions
45 Total dealings/transactions
46 Has the branch provided any goods or services or anything else of value to any part of the legal entity
operating outside New Zealand or to a non-resident associated person for no consideration?
Yes No
If the answer is “Yes”
provide details.
47 In computing the profit or loss of the New Zealand branch, has any part of the income or expenditure recognised involved parts of the
legal entity operating in jurisdictions or territories, or associated persons tax resident in jurisdictions or territories, where the income
of the legal entity or associated person would be taxed at a rate of 15% or less for a company having the usual tax status of a company?
Total value for all such dealings/transactions NZ $000
48 If there are a number of companies in New Zealand which, together with this branch, form a group for tax purposes, please provide a
list of the names of the other group companies below or on a separate schedule.
49 How many full time equivalent staff does this branch employ?
50 How many staff earn more than NZ$150,000 pa (including benefits)?
51 What is the debt percentage of the New Zealand group as calculated under subpart FE of the Income Tax Act 2007?
%
52 Has documentation been produced in support of your transfer prices/apportionment of income and
expenditure?
Yes No
53 Have any dealings with any part of the legal entity operating outside New Zealand or transactions with
non-resident associated persons been the subject of a tax ruling or advance pricing agreement in another
jurisdiction?
Yes No
54 Are any dealings/associated party transactions subject to advance pricing agreement in New Zealand?
Yes No
55 Name of officer providing this information
56 Position
