Announcements
PUBLISHED 24 August 2006

International tax rules under review

The taxation of outbound, non-portfolio investment will be the main focus of a forthcoming discussion document on New Zealand's international tax rules. It will canvass options for changing the controlled foreign company tax rules, as well as any associated changes to the conduit and thin capitalisation rules. It will also look at whether treaty policy on non-resident withholding tax rates on dividends, interest and royalties should be adjusted. For more information see the media statement.


Hon Peter Dunne
MP for Ohariu Belmont
Minister of Revenue
Associate Minister of Health

MEDIA RELEASE

NZ's international tax rules under review

A forthcoming government discussion document will take a fresh look at New Zealand's international tax rules, Revenue Minister Peter Dunne said today.

"The main focus of the discussion document, planned for release by the end of the year, will be the taxation of outbound, non-portfolio investment," Mr Dunne said.

"In particular, the government is committed to taking a fresh look at whether we should continue with our current controlled foreign company tax rules.

"That will include considering the merits of introducing an active-passive distinction between different types of income, which is common practice internationally.

"The discussion document will canvass options for changing those rules, as well as any associated changes to the conduit and thin capitalisation rules.

"It will also look at whether any adjustment should be made to New Zealand's longstanding treaty policy on non-resident withholding tax rates on dividends, interest and royalties

"Proposals will take into account the objectives set out in the Business Tax Review discussion document. Chief of these objectives are to improve the productivity and competitiveness of New Zealand business and to progress the transformation of the New Zealand economy.

"The aim is to take a practical approach whereby our international tax rules are reviewed in light of recent and likely future world developments.

"In particular, the discussion document will consider tax developments in the rest of the world, international investment flows, the benefits of globally-connected businesses, and macro-economic considerations," Mr Dunne said.

Contact: Ainslie Fenwick, Tax advisor, Tel: 04 471 9728