In a joint media release issued on 29 June 2009, the Minister for Trade, Simon Crean, and the Assistant Treasurer, Senator Nick Sherry, announced that Australia and New Zealand have signed a new tax treaty to replace the existing treaty and amending protocol. The new treaty was signed by Mr Crean on 26 June, 2009.
The new treaty reduces withholding tax rate limits on certain dividends, on certain classes of interest, and on royalty payments. These changes reduce the cost to Australian businesses of accessing intellectual property, equity and finance for expansion.
The new treaty will also assist the Australian managed funds industry by providing rules to allow Australia's managed investment trusts to access the treaty's benefits on income derived from New Zealand.
New rules providing time limits on transfer pricing audits, the inclusion of arbitration provisions and a non-discrimination article, as well as new provisions to facilitate short term cross-border secondments will benefit Australian businesses engaged in trans Tasman activities. These changes accord with business and industry's message to the Government in the course of the tax treaty policy review.
An appendix to the joint media release details the technical changes that have been made.
The new treaty will commence when both countries advise that they have completed their domestic requirements. Legislation will be introduced into the Parliament as soon as practicable.
For a copy of the joint media release, No 2009/008, 29 June 2009, go here