Double tax agreement with UK to be updated
New Zealand's double tax agreement with the United Kingdom is being updated to allow for better exchange of information between the two countries, Revenue Minister Michael Cullen announced today.
"New Zealand is party to 27 double tax agreements, which are primarily aimed at reducing tax impediments to cross-border trade and investment, but also help tax administrations to detect and prevent tax evasion," Dr Cullen said.
"The forthcoming changes to our double tax agreement with the UK are in the interests of both countries. Changes to the provisions relating to exchange of information will enable New Zealand to obtain information from the UK that does not involve a UK tax interest. This will assist New Zealand to enforce its own tax laws.
"The agreement is also being amended to address UK concerns about schemes that are designed to avoid UK capital gains tax.
"Provisions pertaining to business profits, dividends, interest and royalties are also being updated, and a provision governing the treatment of income that is not otherwise dealt with under the agreement is being inserted.
"A protocol amending the double tax agreement was signed in London on 4 November. It will enter into force once both countries have promulgated an Order in Council to give effect to the changes.
"Once the protocol enters into force, the changes relating to exchange of information and the UK capital gains tax will take will take effect from 4 November 2003. The other changes will take effect in New Zealand from 1 April following the date of entry into force," Dr Cullen said.
The text of the protocol is available at www.taxpolicy.ird.govt.nz.
Contact: Patricia Herbert [press secretary] 04-471-9412 or 021-270-9013. E-mail [email protected]