Inland Revenue - Tax policy Tax Policy

News and information about the Government's tax policy work programme, including:
- proposed changes to the laws that Inland Revenue is responsible for
- updates on the progress of bills through Parliament
- policy announcements

NZ-Singapore DTA enters into force

13 August 2010

The double tax agreement between New Zealand and Singapore, signed on 21 August 2009 has entered into force, bringing withholding tax rates on dividends, interest and royalties more into line with New Zealand’s new standard treaty rates. For more information, see the media statement.


Hon Peter Dunne
Minister of Revenue

Media statement

Dunne: NZ-Singapore double tax agreement now in force

Revenue Minister Peter Dunne today announced that the double tax agreement between New Zealand and Singapore, signed in August last year, is now in force.

The new agreement replaces the 1973 agreement between the two countries. 

"As well as generally modernising the treaty, the new agreement will bring withholding tax rates on dividends, interest and royalties more into line with New Zealand's new standard treaty rates, meaning reductions in tax rates in some instances," Mr Dunne said.

He explained that under the new agreement, withholding tax on dividends, set at 15% under the 1973 treaty, is reduced to 5% where an investor holds direct investment in a company. The withholding tax on interest will be reduced from 15% to 10%, and the withholding tax on royalties reduces from 15% to 5%.

The new withholding rates will apply in New Zealand from 1 October this year, and in Singapore from 1 January 2011. The later effective date for Singapore reflects that country's system of imposing tax on income earned in the previous year.

Double tax agreements are treaties to facilitate cross-border trade and investment between two countries by removing or minimising tax obstacles and preventing businesses being taxed twice on the resulting income. They also give greater certainty about how cross-border income will be taxed, reduce compliance costs for businesses and lower tax on some income.

New Zealand has 35 double tax agreements, covering most of its important trade and investment partners.

The text of the new double tax agreement is available at www.taxpolicy.ird.govt.nz

Ends

Mark Stewart | Press Secretary | Office of Hon Peter Dunne
Cell +64 21 243 6985