Double tax agreement with South Africa signed

New Zealand and South Africa have signed a double tax agreement, the Government announced today. The main features of the agreement include:

Withholding rates are generally reduced to 15% for dividends, and 10% for interest and royalties.
Many short-term business activities carried out in the other country will be exempt in that country.
New Zealand retains the right to tax income arising in this country from exploration or exploitation of natural resources, coastal shipping and insurance.

The agreement has still to be legislated for in both countries, but is expected to come into effect in the 2002-03 income year. See:

Hon Dr Michael Cullen
Minister of Revenue

Hon Phil Goff
Minister of Foreign Affairs

MEDIA STAEMENT

NZ signs double tax agreement with South Africa

New Zealand has signed a double tax agreement with South Africa, Revenue Minister Michael Cullen and Foreign Minister Phil Goff announced today.

Double tax agreements reduce tax impediments to cross-border trade and investment and assist enforcement of the law between the two countries involved.

"The initiative will help to forge stronger economic links between the two countries. South Africa is a significant emerging market for New Zealand: in 1999 New Zealand sent $72 million worth of exports to South Africa, but by last year that figure had increased to $114 million."

"The next step is for each country to give legal effect to the agreement, which in New Zealand will occur through Order in Council. We expect it to come into force from the start of the 2002-2003 income year," the Ministers said.

The text of the agreement is available on the website of the Policy Advice Division of Inland Revenue at www.taxpolicy.ird.govt.nz.

Contact: Patricia Herbert [senior press secretary] 471-9412 or 021-270-9013. E-mail [email protected]