New Zealand, Canada cut taxes on bilateral business

Wellington (New Zealand), May 3 (Xinhua-ANI): New Zealand and Canada on Thursday signed a new agreement to stop bilateral business being taxed twice.

The agreement would help New Zealand-based businesses compete in Canada and make New Zealand a more attractive place to invest, said New Zealand Revenue Minister Peter Dunne, who signed the pact in Wellington with Canada's Minister of International Trade Ed Fast.

"The updated agreement will modernize our tax treaty arrangements with Canada, bringing them more into line with best international practice," Dunne said in a statement.

Double tax agreements helped reduce tax impediments to trade and investment between countries and gave greater certainty about how cross-border business income would be taxed.

A key feature of the new agreement was the reduction in withholding taxes on dividends from 15 percent to a maximum of 5 percent and on royalties from 15 percent to 10 percent.

Withholding taxes on royalties relating to copyright, computer software and similar products would come down to 5 percent.

The changes made it cheaper for businesses to invest in each country and to bring profits home for reinvestment or distribution to shareholders, said Dunne.

New Zealand now has 37 double tax agreements in force, predominantly with its main trading and investment partners. (Xinhua-ANI)