Australia And New Zealand To Renegotiate Tax Treaty

by Mary Swire, Tax-News.com, Hong Kong

22 January 2008

Australian Treasurer Wayne Swan has indicated that Australia's tax treaty with New Zealand will be renegotiated, as part of a wider review of the economic relationship between the two countries.

Swan made the announcement last week after meeting his counterpart, New Zealand Finance Minister Michael Cullen, in Sydney, where the two minister discussed strategies to improve economic relations.

"The meeting provided an ideal opportunity to get to know Dr Cullen, and for us to talk about global economic conditions and how they affect our national economies, " Swan stated in his first release since being appointed to the position of Treasurer. He added that: "We agreed to look for further opportunities to bring the Australian and New Zealand economies closer together."

Swan went on to note that as 2008 is the 25th anniversary of the Australia New Zealand Closer Economic Relations Trade Agreement (ANZCERTA), which was signed by the Hawke Government in 1983, it was an opportune time to review bilateral economic agreements such as the tax treaty.

"This anniversary is a time for us to reflect on the achievements of the past 25 years. Importantly, it also offers the opportunity for us to consider how to build on this success and reinvigorate the work program going forward. This future work will include the renegotiation of the Australia-New Zealand bilateral tax treaty," he stated.

"Australia is by far New Zealand’s most important economic partner," observed Cullen ahead of the meeting with Swan.

"If we want to continually strengthen that partnership, we need to continue to build strong trans-Tasman relationships, including at senior levels in government," Cullen added.

The current double taxation avoidance treaty between Australia and New Zealand was originally signed in 1995, and was last updated in November 2005.

The 2005 protocol made administrative changes to the agreement, by updating the article in the agreement governing exchange of information, and inserting a new article to allow assistance with tax collection. The protocol also ensured that Australia did not lose priority over New Zealand’s 28 other treaty partners to negotiate lower treaty withholding rates.

Recommended