Australia And New Zealand To Examine Trans Tasman Tax Issues - Costello/Cullen
Hon Peter Costello
Hon Dr Michael Cullen
Treasurer, Finance and Revenue Minister, New Zealand
Australia and New Zealand are to examine the tax treatment of Trans Tasman investments, the Australian Treasurer Peter
Costello and New Zealand Treasurer Michael Cullen announced today.
Consideration will be given to the issue of ‘triangular taxation.’
This occurs where Australian shareholders in a New Zealand company operating in Australia are unable to access
Australian sourced franking credits, with the same problem applying in reverse for New Zealand shareholders in
Australian companies operating in New Zealand.
Both Treasurers agree that the examination of triangular taxation is a worthwhile step in addressing possible barriers
to trans Tasman investment. In Australia the Ralph Review of Business Taxation recommended an examination of triangular
Ministers have instructed officials in both countries to develop a workable model for recognition of imputation credits
in triangular cases, and assess the costs and benefits of applying such a model. Officials are expected to report back
on the issue by 30 June 2001.
Business will be consulted during the development of the model. In Australia this consultation will form part of the
business tax reform process, and in New Zealand it will form part of the normal generic tax policy process.
It is expected that our announcement of the examination of the triangular issue will be reflected in the communiqué that
issues from our Trade Ministers’ meeting in Auckland on 30-31 August 2000 to discuss ways of expanding and deepening
Closer Economic Relations cooperation.