The new double taxation agreement between New Zealand and Australia has entered into force and introduces lower withholding tax rates on certain dividend, interest and royalty payments between New Zealand and Australia, Finance Minister Peter Dunne announced today. The DTA also applies to tax residents of third countries, as the article on non-discrimination applies to nationals of Australia or New Zealand. In addition, the mutual agreement procedure, the article on exchange of information and the article on assistance in the recovery of tax claims apply if the third countries resident for tax purposes are nationals of Australia or New Zealand. The text of the new double taxation convention is available at www.taxpolicy.ird.govt.nz How can I request the competent authority, pursuant to Article 10(3)(c) of the Double Taxation Convention, that a zero withholding tax rate applies to the payment of a given dividend? “The new DTA builds on the already close economic ties between our two countries and reflects the growth and significant changes that have taken place in trade and investment between our two countries since the signing of the last agreement in 1995,” said Mr. Dunne. An exemption from New Zealand taxation may be possible under a double taxation agreement. In general, New Zealand`s double taxation treaties provide for an exemption from income tax if the employee is present in New Zealand for 183 days or less, is employed by a non-resident entity and the remuneration is not borne by a permanent establishment (PE) in New Zealand. If New Zealand has a double taxation agreement with the person`s country of residence or jurisdiction, income from work may not be taxable if certain conditions are met. It is possible that a PE may be created as a result of significant business travel, but this depends on the type of services provided, the duties and degree of power of the employee, as well as the specific terms of an applicable double taxation agreement.
How can I ask the competent authority to take a decision in accordance with Article 4(3) of the Double Taxation Convention between New Zealand and Australia, as amended by Article 4(1) of the Multilateral Convention implementing the Tax Convention, concerning measures relating to measures relating to measures to prevent profit erosion and profit shifting?? Australia also has bilateral agreements with a number of countries on the exchange of tax information. The two countries have since ratified the agreement and exchanged diplomatic notes. Extended business travellers may be taxed on income earned in relation to their working days in New Zealand, unless relief is granted under New Zealand national law or an applicable double taxation treaty. DTAs offer greater relief from double taxation than is possible under national law. In addition to New Zealand`s domestic agreements that provide for international double taxation relief, New Zealand has entered into double taxation treaties with 40 countries/jurisdictions to avoid double taxation and to enable cooperation between New Zealand and foreign tax authorities in the application of their respective tax laws. Article 13(6) of the DTA had been included in order to avoid double taxation of capital gains of outgoing residents. Under the Australian CGT regime, a person who is no longer a resident of Australia is generally taxed on unrealised gains from CGT assets held at that time, with the exception of assets that are taxable Australian property. However, a person who is no longer a tax resident of Australia may choose either to pay taxes at the time of departure (based on the difference between the market value of the non-taxable Australian real estate assets at the time of departure and the cost base of those assets) or to defer tax on a profit until the actual sale of those non-taxable Australian real estate assets. In both cases, that person is considered to have sold and repurchased the non-taxable Australian real estate assets for an amount equal to their market value at the time he or she ceases to be an Australian tax resident, within the meaning of New Zealand tax law (which generally does not currently tax capital gains).