New Zealand and Canada rejoice to the new tax agreement

03.05.2012 Today, on May 3, the ministers of two countries signed the corrected agreement on double taxation avoidance, urged to replace the existing bilateral agreement dated still by 1980.

The key moment of the corrected agreement is decrease in a rate withheld from dividends and a royalty of the tax raised in the territory of both countries.

The rate of a withheld tax on dividends will be lowered from 15 % to the greatest possible 5 % for the investors owning of at least 10 % company shares, paying dividends. The rate of a tax on a royalty will be lowered from 15 % to 10 %, the rate at level of 5 % will be applied on a royalty from the property rights and the software.

Expert’s opinion

«The conclusion of the new tax agreement will strengthen the communications between two states. The enterprise, operating in the territory of New Zealand, can carry out competitive activity also in the territory of Canada, thereby New Zealand will turn into the region even more attractive for the investment.

It should be noted that New Zealand becomes really attractive place for business. The New Zealand trusts which are released from tax payment are especially interesting. That is much important, information on the beneficiary of a trust isn't brought in the register of the companies. Thus full confidentiality and optimization of the taxation of business is supported.»

On the basis: http://www.parl.gc.ca

Andrianova Irina ( the leading lawyer of legal support and banking consulting department of Honest & Bright)