New Zealand and the Isle of Man are set to usher in a new level of tax transparency, cooperation and compliance, after two separate tax agreements between the countries came into force.

The High Commission in London has confirmed that the Governments of New Zealand and the Isle of Man have appropriately completed their legal ratification processes regarding the Tax Information Exchange Agreement (TIEA) and Double Taxation Agreement (DTA) signed by the countries. With the stipulated one year waiting period over, as outlined in the agreements, the DTA and TIEA came into force on July 27th.

Under the new TIEA, the Governments of both countries will be able to request taxation and bank information on taxpayers in cases of suspected tax evasion or investigations. The agreement is aimed at greatly reducing instances of tax evasion between the two countries, and counts towards the Organization of Economic Cooperation and Development’s (OECD) standards of international tax transparency.

The DTA eliminates the occurrence of double taxation on incomes earned in either country, by allocating taxation rights to Governments, on a pre-determined set of taxpayer incomes. The DTA also addresses transfer pricing adjustments on transactions carried out by cooperation operating between the nations.

The Isle of Man Government stated that the now-effective agreement shows the country’s dedication to upholding internationally agreed standards on taxation and cooperation, along with the principles of transparency and effective exchange of information in tax matters.

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