The signing of a new Double Taxation Agreement (DTA) between Australia and New Zealand has taken place.

On the 29th of June New Zealand Trade Minister Tim Groser signed the new agreement on behalf of New Zealand in a Paris based ceremony. There is no date set yet to its enforcement as in it needs to be legally enacted in both countries. In New Zealand this will happen by the Order of the Council, which is expected to occur later in 2009.

The key changes in the new DTA, according to Tim Groser, are lower withholding taxes on dividend and royalty payments between Australia and New Zealand, changes to pension payments, and overall reduced compliance costs.

In the new DTA the standard withholding tax rate on dividends will be 15%, but, 5% for an investing company has at least a 10% shareholding in the company paying the dividend. This rate will be reduced to 0% if the investing company holds 80% or even more shares in the other company.

Pensions are also addressed, with pensions that are tax free in one country now being tax free in the other.