On May 12th the New Zealand Government announced the signing of an Order in Council for the DTA between New Zealand and Singapore. The signing of the Order officially incorporates the agreement into national legislation. According to Peter Dunne, New Zealand Revenue Minister, the DTA will come into effect when the equivalent legal ratification process is carried out by the Government of Singapore.

The new agreement is intended to replace the DTA signed by Singapore and New Zealand in 1973. The DTA will lower withholding rates on dividends, royalties and interest. As the bi-lateral agreement will be updated to modern standards it will also serve to increase the levels of protection and certainty for cross-border business. The DTA will also conform to the international recognized standards of taxation transparency and information sharing, as set out by the Organization for Economic Cooperation and Development.

Singapore currently holds 61 Comprehensive Double Taxation Agreements, 7 limited taxation treaties, and 17 signed but un-ratified DTAs. New Zealand holds 35 ratified DTAs, and an additional 15 Tax Information Exchange Agreements.

Photo by beggs

New Zealand and Singapore currently have a Double Taxation Agreement, it was signed in 1973 and has been present since its inception. As stated by Peter Dunne, New Zealand Revenue Minister, at the release of this signing “The agreement will modernize our tax treaty arrangements with Singapore and bring them into line with best international practice,” and “In particular, the new agreement will allow for full exchange of information on tax matters between our two countries.”

Singapore imports approximately NZ$1.9 billion worth of goods into New Zealand, imports NZ$700 million worth of New Zealand goods and has NZ$1.6 billion worth of direct investments in New Zealand. The importance of Singapore as an economic and trading partner cannot be understated. The DTA will allow for this relationship to flourish further, by providing parties in both countries with certainties about the taxation liabilities that will be faced in their activities.

According to an announcement made by the Chile Foreign Minister Alejandro Foxley, made on the 21st of November at a meeting of trade ministers at the APEC summit, Australia and Peru are currently looking to join the four country FTA in its next round of expansions. A similar announcement was made in regards to the United States in September.

Currently, New Zealand, Singapore, Chile and Brunei hold a free trade agreement, called the Trans Pacific Economic Partnership (although previously named the P4). It was signed in 2005 and came into force 28th of May 2006. The free trade agreement aims to abolish 90% of tariffs for trade between participating countries by 2015.

There are no details yet of how new entrants into the free trade agreement will affect existing members, in fact it is not yet clear which countries will be participating in them. All APEC members are welcome to apply to the agreement before the commencement of the March 2009 negotiations.

The Asia-Pacific Economic Co-operation (APEC) is most likely going to be based around the current economic situation of the world and the possible responses of all countries involved in the meeting. If the recently finished G20 summit is any indication, the economic situation will be the primary talking point.

The meeting is attended by 20 world leaders, and over 3600 delegates. Figures show that the trade between APEC countries accounts for almost half of that in the world and nearly 60 percent of the world’s Gross Domestic Product.

John Key is scheduled to meet the Queen of England, and the British Prime minister after the APEC meeting.

The current APEC countries are Australia, Brunei, Canada, Chile, China, Indonesia, Japan, Hong Kong, South Korea, Malaysia, Mexico, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam. India, Mongolia, Pakistan, Laos, Bangladesh, Colombia and Ecuador are also seeking membership.

The visiting US-NZ Council president John Mullen was quoted as saying that Barack Obama does not wish to reverse any globalisation work done so far, and that the? situation would only be worse off if it were. He said that relations between the United States and New Zealand are at the highest point that they have been at in over a quarter of a century.

Some commentators even claim that New Zealand’s anti-nuclear stance will not be as much of a hindrance under Barack Obama as it was previously. The stance was often seen as one of the key disagreement points in previous negotiations with New Zealand.

Free Trade talks are scheduled to be held in March between the United States and the Trans-Pacific Partnership of New Zealand, Brunei, Singapore and Chile.

Double Taxation agreements prevent the situation of taxation on one income by two countries, through coming to an agreement as to what incomes will be taxed in the country of residence and exempt in the country of occurrence. It also deals with the opposite case where the income will be taxed at the country of occurrence and compensation arises in the country of residence.
Double Taxation also extends to more comprehensive sharing of tax information between tax authorities.

New Zealand currently holds double taxation agreements with the following countries:

Australia
Austria
Belgium
Canada
Chile
China
Czech Republic
Denmark
Fiji
Finland-
France
Germany
India
Indonesia
Ireland
Italy
Japan
Malaysia
Mexico
Norway
Poland
Republic of Korea
Russian Federation
Singapore
South Africa
Spain
Sweden
Switzerland
Taiwan
Thailand
The Netherlands
The Philippines
United Arab Emirates
United Kingdom
United States of America