INDEPENDENT NEWS

Updating Of Philippines Double Tax Agreement

Published: Tue 26 Mar 2002 11:12 AM
New Zealand and the Philippines have agreed to update our 22 year old double tax agreement, Revenue Minister Michael Cullen announced today.
Double tax agreements reduce impediments to trade and investment between two countries and help the enforcement of each other's laws. At present, New Zealand has double tax agreements with 26 countries.
The updated agreement will be given legal effect through Order in Council later this year. Main changes are:
- Withholding rates on dividends and interest will be lowered to what are now standard tax treaty rates in New Zealand's double tax agreements. The rate on dividends decreases from 20 percent to 15 percent, and on interest from 15 percent to 10 percent.
- New Zealand will no longer provide credits for tax "spared", or given up, under Philippine law.
"Tax sparing provisions with developing countries to help them attract foreign investment were common within the OECD in the 1970s and 1980s but the trend is now away from them as they can be abused.
“Over the last few years New Zealand has systematically negotiated amendments to its double tax agreements to close any potential loopholes these provisions may have opened," Dr Cullen said.
The updated agreement, with the changes highlighted, is available on the website of the Policy Advice Division of Inland Revenue at www.taxpolicy.ird.govt.nz.
Ends

Next in New Zealand politics

Concerns Conveyed To China Over Cyber Activity
By: New Zealand Government
GDP Decline Reinforces Government’s Fiscal Plan
By: New Zealand Government
New Zealand Provides Further Humanitarian Support To Gaza And The West Bank
By: New Zealand Government
High Court Judge Appointed
By: New Zealand Government
Parliamentary Network Breached By The PRC
By: New Zealand Government
Tax Cuts Now Even More Irresponsible
By: New Zealand Labour Party
View as: DESKTOP | MOBILE © Scoop Media