Aus-NZ Imputation Credits Need to be Discussed
April 12, 2012 New Zealand Taxation
The current tax treatment of dividend returns between Australia and New Zealand is “alien” to the goals of the two country’s Closer Economic Relationship Agreement and needs to be addressed as quickly as possible.
According to a recent statement made by the chief executive of Business NZ Phil O’Reilly, the governments of Australia and New Zealand need to act urgently to address the issue of double taxation on dividend returns between the two countries, in order to boost cross border business.
Phil O’Reilly explained that one of the key issues int he bilateral relations between Australia and New Zealand that currently needs to be discussed is modernizing the regulations imputation and franking credits, which are still not mutually recognized by the tax authorities in both countries. He claimed that dividend returns between trans-Tasman businesses are effectively taxed twice and are a strong disincentive for companies looking at expanding between the two countries, and, according to him, is “…completely alien to the goals of CER and a single economic market.”
The issue of imputation credits is set to be discussed at this year’s Australia New Zealand Leadership Forum which will open in Sydney on April 12th. The forum will also host discussions on the economic future of the CER and the potential for New Zealand and Australia to leverage their economic ties to support mutual expansions into other economic zones.
Photo by iljimae