UK And New Zealand Sign Updated DTA

by Robert Lee, Tax-News.com, London

08 November 2007

The double tax agreement between the United Kingdom and New Zealand is being updated to strengthen co-operation between the two countries in the enforcement of their tax laws and collection of tax.

A Protocol amending the exchange of information within the UK/New Zealand Double Taxation Convention was signed in London on Wednesday by Jane Kennedy MP, Financial Secretary to the UK Treasury and Jonathan Hunt, the New Zealand High Commissioner.

The 1983 agreement between the two countries is being updated to follow more closely the new OECD standard on exchange of information between tax authorities and, in particular, to allow the authorities to exchange information on other taxes besides income tax. A new provision regarding assistance in the collection of taxes between the countries has been added to the text of the agreement.

The Protocol will be presented to the UK Parliament early next year for approval, and will enter into force once both countries have completed their legislative procedures. It will take effect in both countries from the date that it enters into force.

“Double tax agreements have two purposes: their main purpose is to reduce tax impediments to cross-border trade and investment, but they also help the tax authorities of the two countries involved to detect and prevent tax avoidance and evasion. The update will also enable the two tax authorities to request assistance from each other in the recovery of tax debt," New Zealand Revenue Minister Peter Dunne commented.

He continued: “Once in effect, the changes will benefit both countries. New Zealand stands to benefit through a reduction in tax avoidance and evasion and an improvement in revenue collection – especially given the number of New Zealanders who live in the United Kingdom."

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