Mexico-NZ double tax agreement comes into force
New Zealand's new double tax agreement with Mexico will enter into force on 16 June, Revenue Minister Peter Dunne announced today.
The agreement will take effect in both countries from 1 August 2007 for withholding tax. For other taxes it will generally take effect from 1 January 2008 in Mexico and from 1 April 2008 in New Zealand.
"I am very pleased that the new double tax agreement with Mexico, our top Latin American trading partner, has become a reality," Mr Dunne said.
"Mexico accounts for nearly half our trade with Latin America and is one of our most important milk powder markets anywhere in the world.
"Dairy products and meat made up the bulk of our NZ$424 million in exports to Mexico in the year to December 2006. Mexican exports to New Zealand for the same period – mostly computers, beer, motor vehicles and transmission apparatus – were worth NZ$138 million.
"The new double tax agreement with Mexico brings to 33 the number of such agreements we have with other countries.
"Double tax agreements are very important in reducing the costs of doing business and forging stronger economic links between two countries. They remove tax obstacles to cross-border trade and investment and prevent businesses being taxed twice on the resulting income.
"They also give greater certainty about how cross-border investment income is to be taxed, reduce compliance costs for some activities and lower tax on some income," Mr Dunne said.
The text of the new double tax agreement is published at www.taxpolicy.ird.govt.nz.
Contact: Ted Sheehan, Press secretary to Mr Dunne, 04 470 6985