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.

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Related News:
NZ-Russia Investigating FTA
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This entry was posted on Tuesday, June 30th, 2009 at 2:06 am.
Categories: International Finance, International Taxation, New Zealand Finance, New Zealand Taxation.

5 Comments, Comment or Ping

  1. Helen

    As an Australian living and working in NZ the proposed DTA will save me a fortune in tax if I remain in NZ after I claim my Aussie Super. I am keen to find out when the DTA will be ratified as I want to retire in the next few months

    Feb 6th, 2010

  2. Editor

    The New Zealand Government has begun the ratification process. All that is left is for New Zealand to complete it, Australia to begin its own, and the post-signing two month waiting period to expire.

    Theoretically this could happen by the end of 2010.
    Though no one is giving an “official” timeline.
    NZ-Australia DTA One Step Closer

    Feb 18th, 2010

  3. Helen

    I read on the Australian Parliament website yesterday that the Aussie side of the legislation has been signed off by the Governor General.

    Mar 16th, 2010

  4. Editor

    Good News!
    Everything done, dusted, signed and completed.
    Both countries have put legal effect to the document, and given each other notice of the fact.

    Changes will take effect from April 1st, and withholding rates will be changed on May 1st.
    NZ-Australia DTA Come Into Force

    Mar 22nd, 2010

  5. Helen

    It’s the best news ever for Aussies living in NZ

    Mar 24th, 2010

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