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Inland Revenue

Tax Policy

PUBLISHED 4 September 2000

Russia-NZ DTA to be signed

The Government is expected to sign a double tax agreement with the Russian Federation tomorrow in Wellington. Two years in the making, the Russia-New Zealand agreement will bring to 27 the number of New Zealand DTAs in force with other countries. The new DTA will come into force once both countries have completed domestic procedures to give legal effect to the signed agreement, which in New Zealand will require an Order in Council. The DTA is expected to apply in New Zealand from 1 January 2001 for withholding tax, and from the 2001-02 income year for all other income tax. For the text of the as yet unsigned DTA, see Russia-NZ DTA. For the Government's statement on the DTA, see media release.

Hon Phil Goff
Minister of Foreign Affairs and Trade

Hon Dr Michael Cullen
Minister of Finance, Minister of Revenue


Goff to sign Double Tax Agreement with Russia

Foreign Minister Phil Goff and Russian First Deputy Minister of Finance, Dr Sergei Shatalov, will sign a Double Tax Agreement between New Zealand and Russia tomorrow.

"The Agreement will help to reduce the costs for New Zealanders doing business in Russia. It is the most significant agreement signed with Russia since the establishment of the Russian Federation," Mr Goff and Michael Cullen, Minister of Finance and Minister of Revenue said.

"Russia is one of our largest markets for dairy products and offers significant potential for other kinds of business. This agreement will go a long way to reduce the tax impediments to cross-border trade and investment in that country."

"Double tax agreements help trade and investment by better integrating the income tax systems of the two countries involved. For example, they prevent businesses being taxed twice on income they earn in another country, once in that country and again at home.

"Double tax agreements provide greater certainty about future taxation, reduce compliance costs on short-term activities, and lower tax on some income. They also assist enforcement of the law by allowing the exchange of information between tax authorities.

Mr Goff will meet Dr Shatalov in Wellington tomorrow at 3.30pm and they will sign the agreement then.

The Ministers said that the agreement with Russia will extend to 27 the number of double tax agreements in force with our main trading partners.


Contact: Paul Goldsmith 04 471 9794 025 477 982

Key features of the Russia-New Zealand double tax agreement are:

  • New Zealanders will pay non-resident withholding tax of no more than 15% for dividends derived from Russia, 10% for interest, and 10% for royalties.
  • The profits of New Zealand businesses will generally be exempt in Russia if the business is of a temporary nature.
  • Mobile activities such as consultancy, building and construction sites, installation and assembly projects, and natural resource exploration and exploitation must be conducted in Russia for more than 12 months before Russia can tax the income.
  • Income from professional services can be taxed in Russia only if the person performing the services is present for more than 183 days or has a fixed base there.
  • New Zealand employees working in Russia will generally not be taxed by Russia unless they spend more than 183 days there.
  • Profits from insurance, coastal shipping, domestic air transport and real property (including agriculture and forestry) can be taxed in the country in which they are situated, even if the activity is of a temporary nature.
  • Pensions paid by the government of either state can be taxed in both states (although in the case of the state of residence of the recipient, the taxing right is limited to 50% of the amount of the pension. All other pensions and annuities are to be taxed solely by the state of residence.
  • Certain forms of discriminatory tax treatment between non-residents by either tax authority are prohibited.

Russians living or carrying on a business in New Zealand will enjoy similar benefits.

The agreement is expected to apply in New Zealand from 1 January 2001 for withholding tax, and from the 2001-02 income year for all other income tax.

The text of the agreement is available on the website of the Policy Advice Division of Inland Revenue at