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Inland Revenue

Tax Policy

PUBLISHED 26 March 2002

Double tax agreement with Philippines being updated

The double tax agreement between New Zealand and the Philippines is being updated, Revenue Minister Michael Cullen announced today. The changes include lower withholding rates on dividends and interest, and the removal of New Zealand credits for tax "spared" under Philippine law. The updated agreement will be given legal effect later in the year. For more information on the announcement see the Government's media release. Changes to the agreement are highlighted in "Updated New Zealand-Philippines double tax agreement".

Hon Dr Michael Cullen
Minister of Finance


Updating of Philippines double tax agreement

New Zealand and the Philippines have agreed to update our 22 year old double tax agreement, Revenue Minister Michael Cullen announced today.

Double tax agreements reduce impediments to trade and investment between two countries and help the enforcement of each other's laws. At present, New Zealand has double tax agreements with 26 countries.

The updated agreement will be given legal effect through Order in Council later this year. Main changes are:

  • Withholding rates on dividends and interest will be lowered to what are now standard tax treaty rates in New Zealand's double tax agreements. The rate on dividends decreases from 20 percent to 15 percent, and on interest from 15 percent to 10 percent.
  • New Zealand will no longer provide credits for tax "spared", or given up, under Philippine law.

"Tax sparing provisions with developing countries to help them attract foreign investment were common within the OECD in the 1970s and 1980s but the trend is now away from them as they can be abused.

"Over the last few years New Zealand has systematically negotiated amendments to its double tax agreements to close any potential loopholes these provisions may have opened," Dr Cullen said.

The updated agreement, with the changes highlighted, is available on the website of the Policy Advice Division of Inland Revenue at

Contact: Patricia Herbert [senior press secretary] 471-9412, 021-270-9013, [email protected]