| Double Tax Treaties
New Zealand has double tax treaties with 36 countries (listed
below). A New Zealand Foreign Trust structure can often take advantage
of the low rates of non resident withholding tax deductions of 10-15%,
deducted from interest, dividends and royalties sourced from any
of these 36 countries.
New Zealand tax treaties identify the place of residence of the trustee as the place of residence of the trust. A New Zealand trust can therefore be used to access a total of 36 New Zealand tax treaty countries, minimising and sometimes eliminating the deduction of taxes on profits in other countries. New Zealand tax treaty partners include:
Australia, Austria, Belgium, Canada, China, Chile, Czech Republic,
Denmark, Fiji, Finland, France, Germany, India, Indonesia, Ireland,
Italy, Japan, Korea (Republic of), Malaysia, Mexico, Netherlands,
Norway, Philippines, Poland, Russia, Singapore, South Africa, Spain,
Sweden, Switzerland, Taiwan, Thailand, United Arab Emirates, United
Kingdom, Turkey*, and United States. Higher rates of Non Resident Withholding
Tax may apply to other countries.
A New Zealand offshore trust with a trustee resident in New Zealand
may qualify as a resident of New Zealand for the purposes of a double
taxation treaty. Tax treaties vary in the treatment of trusts and
of "persons" not subject to tax in their country of residence. The
New Zealand offshore trust is however considered to be "subject
to tax" in New Zealand in terms of its double tax treaties. Consequently
the New Zealand offshore trust could be entitled to the benefits
of double tax treaties, but is not taxed in New Zealand. As all
treaties are not identical professional advice must be obtained.
We can assist in ensuring that the New Zealand trust can avail itself
of the advantages of a particular tax treaty (for example reduced
withholding tax, and no source country tax on business income providing
there is no permanent establishment in that foreign jurisdiction.)
For further information please contact us
here
*Yet to be ratified by both Governments
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