Spain-New Zealand double tax agreement in force
New Zealand's new double tax agreement with Spain has come into force, Revenue Minister Peter Dunne has announced.
The agreement with Spain was first signed on 28 July 2005 and has been awaiting completion of legal formalities in both New Zealand and Spain. This has now happened and the new agreement will be effective for New Zealand withholding taxes from 1 September 2006 and for all other New Zealand taxes from 1 April 2007.
"This is New Zealand's thirty-first agreement, and is a significant step forward in the government’s Latin American trading strategy, because Spain is an important entry point for that region," Mr Dunne said.
New Zealand's $222 million export trade to Spain includes frozen fish and shellfish, kiwifruit and sheep meat. Imports from Spain are worth around $165 million and include cars, olive oil, medicines, ceramics and confectionary.
Double tax agreements play an important role in fostering cross-border trade and investment by preventing businesses from being taxed twice, giving greater certainty to the tax treatment of cross-border business and reducing compliance costs for some activities.
"New Zealand already has a significant trading relationship with Spain, which this agreement will help to grow further," Mr Dunne said.
The text of the new double tax agreement with Spain is published at www.taxpolicy.ird.govt.nz.