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Inland Revenue

Tax Policy

PUBLISHED 16 October 2008

NZ-Philippines DTA updated

The double tax agreement between New Zealand and the Philippines has been updated, with effect from 1 December 2008, the government announced today. The main changes made to the 28-year-old treaty were the reduction of several withholding rates and removal of provisions that allowed tax sparing. For more information see the media statement.

Hon Peter Dunne
MP for Ohariu Belmont
Minister of Revenue
Associate Minister of Health


Double tax agreement with Philippines updated

New Zealand's double tax agreement with the Philippines has been updated, with effect from 1 December, Revenue Minister Peter Dunne announced today.

"The most important change made to the 28-year-old double tax agreement between our two countries is the lowering of several withholding rates," Mr Dunne said.

"Rates on dividends go down from a split rate of 15% and 25% to a flat rate of 15%, on interest from 15% to 10%, and on royalties from a split rate of 15% and 25% to a flat rate of 15%.

"The other significant change to the agreement has been the removal of provisions that allow 'tax sparing'.

"Tax sparing was once a fairly common concession in our double tax agreements with developing countries. It allowed New Zealanders to invest in a country to take advantage of tax incentives offered there, and then to claim a foreign tax credit against their New Zealand tax liability on income earned in the other country as if they had paid tax in full there.

"With the updating of the Philippines treaty, tax sparing provisions have now been removed from all our double tax agreements.

"Double tax agreements play an important role facilitating trade and investment between two countries, Mr Dunne said. "I welcome the update of our treaty with the Philippines."

The text of the amending protocol to the double tax agreement is published at

Ted Sheehan, Press secretary to Mr Dunne, 04 470 6985