Policy matters/amendments resulting from the Taxation (Personal Tax Cuts, Annual Rates, and Remedial Matters) Act 2008, including a DTA with the Czech Republic.

A new double tax agreement (DTA) between New Zealand and the Czech Republic has entered into force, bringing New Zealand's total number of DTAs in force to 35. A protocol amending the existing DTA with the United Kingdom has also entered into force. Orders in Council have been made to incorporate into New Zealand law a new tax information exchange agreement with the Netherlands on behalf of the Netherlands Antilles and to add Mexico and Austria to the list of treaty partners approved for the purpose of the "venture capital exemption" in section CW 12 of the Income Tax Act 2007. In addition, arrangements for assistance in collection of taxes under the DTA with Australia became effective on 8 September 2008.

New double tax agreement with the Czech Republic

The new DTA with the Czech Republic is expected to play an important part in facilitating increased bilateral trade and investment. DTAs are designed to provide certainty of tax treatment and to prevent the double taxation of cross-border transactions. By providing for the exchange of information on tax matters, DTAs also play a valuable role in preventing tax avoidance and evasion.

The DTA was signed on 26 October 2007 and incorporated into New Zealand law by Order in Council on 28 July 2008. DTAs do not enter into force until the necessary legal procedures have been completed in both countries. Those procedures have now been completed in both countries, and the agreement entered into force on 2 September 2008. The agreement has effect for New Zealand withholding taxes from 1 January 2009 and for other New Zealand taxes for income years beginning on or after 1 April 2009.

Protocol amending the existing double tax agreement with the United Kingdom

The protocol with the United Kingdom updates Article 25 "Exchange of information" of the DTA to allow for information exchanges in relation to taxes other than income tax. The protocol also inserts a new article "Assistance in the collection of taxes" into the DTA, to allow the tax authorities of the two countries to request assistance from each other in the collection of tax debt.

The protocol was signed on 7 November 2007. An Order in Council incorporating the protocol into New Zealand law was made on 28 July 2008. The protocol entered into force on 28 August 2008, and its provisions have effect from that date.

New tax information exchange agreement with the Netherlands on behalf of the Netherlands Antilles

The tax information exchange agreement with the Netherlands will enable the tax authorities of New Zealand and the Netherlands Antilles to exchange information on tax matters in order to assist each other in the detection and prevention of tax avoidance and evasion.

The agreement was signed on 1 March 2007 and incorporated into New Zealand law by Order in Council on 1 September 2008. The agreement will enter into force once both countries have completed an exchange of diplomatic notes confirming that all domestic processes for entry into force are complete. This is likely to be complete by the time of publication.

Austria and Mexico added to the list of approved countries

An Order in Council was made on 1 September 2008 adding Mexico and Austria to the list of approved treaty partners for the purposes of the "venture capital exemption" in section CW 12 of the Income Tax Act 2007. The Order in Council will enter into force on 2 October 2008. From that date, qualifying investors from Austria and Mexico will not be subject to New Zealand tax on gains on the value of shares in certain listed New Zealand companies.

Assistance in collection under the double tax agreement with Australia

Now it has taken effect, Article 27 "Assistance in collection of taxes" in the DTA with Australia will facilitate cooperation between Australia and New Zealand in the recovery of outstanding tax debt.

A protocol making changes to New Zealand's existing DTA with Australia was signed on 15 November 2005. An Order in Council incorporating the protocol into New Zealand law was made on 26 June 2006. The protocol came into force on 22January 2007 and has effect from that date, except for Article 4, which inserts new Article 27 "Assistance in collection of taxes". The date from which the new assistance in collection article takes effect has now been agreed by the governments of Australia and New Zealand as 8 September 2008.