Contents
Introduction
Background
Ways of earning income
Analysis
Taxes on Non-residents
Taxes on residents
Taxation of residents in practice
The CFC regime
The FIF regime
Directions for reform
Chapter 3 – Taxation of non-residents
Taxes on debt supplied by non-residents
Reforms
Taxation of equity supplied by non-residents
Chapter 4 – Taxation of residents’ foreign-source income
Taxing income earned through foreign companies
Taxation of foreign-source income
Controlled Foreign Company (CFC) regime
Purpose and description
Some options for change
Foreign Investment Fund (FIF) regime
Purpose and description
FIF regimes in other countries
Problems with the current FIF regime
Some options for change
Foreign Dividend Withholding Payment (FDWP) regime
The role of bilateral tax agreements
Defining the international tax base
Reducing undesirable double taxation
Dealing with international tax problems
Implications for policy making and treaty negotiation
Effect of DTAs
DTA policy
Review of existing DTAs
Criteria for assessing DTAs
International relations considerations
Conclusion
Australia
Mechanisms for reform
Annex – The practical effect of DTAs on tax paid by New Zealand exporters
Introduction
Cases compared
Exporting goods to a foreign firm in Country X
Setting up a storage warehouse in Country X
Setting up retail shop in Country X
Incorporating the shops trading in Country X
Implications for policy making and treaty negotiation