26 September 2013
Tax agreement with Japan boosts trade and investment opportunities
Japan and New Zealand today exchanged diplomatic notes, for a new double tax agreement which will make it much easier to do business between the two countries, Revenue Minister Todd McClay announced today.
"The New Zealand Government is extremely supportive of opportunities to increase trade with Japan and this agreement will further assist by reducing tax impediments to cross-border trade and investment. It will also assist tax authorities of the two countries to detect and prevent tax avoidance and evasion," says Mr McClay said.
The new double tax agreement is a vast improvement over the existing 50-year old 1963 agreement between Japan and New Zealand.
"Japan is New Zealand’s fourth largest trade and investment partner and the new agreement builds on our recent agreements with Australia, the United States, Singapore and Hong Kong," says Mr McClay.
The updated agreement would come into effect 30 days from the exchange of notes. Once in effect, the changes will benefit both countries.
For withholding taxes, the new agreement will begin to apply from 1 January 2014. For New Zealand income tax it will apply for income years beginning on or after 1 April 2014 and for Japanese income tax it will apply for income years beginning on or after 1 January 2014.
The text of the new DTA is available at www.taxpolicy.ird.govt.nz.