Are tax sparing disclosures still required?

Some New Zealand double taxation agreements allow a taxpayer to claim a domestic credit for tax which the agreement deems to have been paid in the other country. New Zealand has, or has had, tax sparing arrangements with the following countries:

• China
• Fiji
• India
• Republic of Korea
• Malaysia
• Philippines (terminated)
• Singapore
• Thailand (terminated).

A taxpayer who has claimed a foreign tax credit in respect of a tax sparing arrangement under a double taxation agreement must file a Tax sparing disclosure return (IR 486). A separate disclosure return is required for each tax spared arrangement entered into.

There has been a recent procedural change. The completed forms are now to be sent to:

• Manager, International Revenue Strategy
  Inland Revenue Department
  PO Box 2198
  Wellington 6140