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Income Tax Act 2007

Core provisions - Double tax agreements

BH 1: Double tax agreements

You could also call this:

"Agreements to stop people being taxed twice by New Zealand and another country"

Illustration for Income Tax Act 2007

A double tax agreement is an agreement between New Zealand and another country to avoid taxing people twice. You can find more information about how these agreements are published in Part 3 of the Legislation Act 2019. These agreements help New Zealand and other countries work together on tax matters.

When New Zealand makes a double tax agreement with another country, it is to help people who live in one country and work in another. The agreement is made between the governments of the two countries. You can read about the rules for these agreements in the Tax Administration Act 1994, including Part 10A and Part 11B.

A double tax agreement can be used for many things, like relieving double taxation, taxing income from New Zealand, and stopping people from avoiding tax. It can also be used to share information between countries and to help recover unpaid tax. However, a double tax agreement does not apply to some taxes, such as multinational top-up tax, unless the agreement says it does.

If you want to know more about tax, you can look at the Official Information Act 1982, the Privacy Act 2020, or the Tax Administration Act 1994.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512385.

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Part BCore provisions
Double tax agreements

BH 1Double tax agreements

  1. Double tax agreement means an agreement that—

  2. has been negotiated for 1 or more of the purposes set out in subsection (2); and
    1. has been agreed between—
      1. 1 or more governments of territories outside New Zealand and the government of New Zealand; or
        1. the Taipei Economic and Cultural Office in New Zealand and the New Zealand Commerce and Industry Office; and
        2. has entered into force as a result of a declaration by the Governor-General by Order in Council under subsection (3).

          1. The following are the purposes for which a double tax agreement may be negotiated:

          2. to provide relief from double taxation:
            1. to provide relief from tax:
              1. to tax the income derived by non-residents from any source in New Zealand:
                1. to determine the income to be attributed to non-residents or their agencies, branches, or establishments in New Zealand:
                  1. to determine the income to be attributed to New Zealand residents who have special relationships with non-residents:
                    1. to prevent fiscal evasion:
                      1. to facilitate the exchange of information:
                        1. to assist in recovering unpaid tax.

                          1. An agreement to which subsection (1)(a) and (b) apply comes into force as declared by the Governor-General by Order in Council and on the date determined under the agreement.

                          2. An Order in Council under subsection (3) is secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).

                          3. Despite anything in this Act, except the provisions listed in subsection (4B), or in any other Inland Revenue Act or the Official Information Act 1982 or the Privacy Act 2020, a double tax agreement has effect in relation to—

                          4. income tax:
                            1. any other tax imposed by this Act:
                              1. the exchange of information that relates to a tax, as defined in paragraph (a)(i) to (v) of the definition of tax in section 3(1) of the Tax Administration Act 1994.

                                1. The provisions of this Act referred to in subsection (4) are—

                                2. subsection (4C):
                                  1. subsection (5):
                                    1. subsection (5B):
                                      1. section BG 1 (Tax avoidance):
                                        1. section GB 54 (Arrangements involving establishments):
                                          1. section RF 11C (Interest paid by non-resident companies to non-residents).

                                            1. A double tax agreement does not have effect in relation to multinational top-up tax unless the double tax agreement expressly provides otherwise.

                                            2. An agreement that provides for the recovery of unpaid tax is subject to Part 10A of the Tax Administration Act 1994.

                                            3. A foreign account information-sharing agreement is subject to Part 11B of the Tax Administration Act 1994.

                                            4. A reference in a double tax agreement to the profits of an activity or business is to be read, if possible, as a reference to the amount that would be a person's net income if that activity or business were their only activity or business.

                                            5. A reference in a double tax agreement to 2 persons being unrelated is to be read, if possible, as a reference to 2 persons being not associated.

                                            Compare
                                            Notes
                                            • Section BH 1(1)(b)(i): amended (with effect on 21 October 2013), on , by section 4 of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
                                            • Section BH 1(3): replaced, on , by section 6(1) of the Taxation (Annual Rates for 2016–17, Closely Held Companies, and Remedial Matters) Act 2017 (2017 No 14).
                                            • Section BH 1(3B) heading: inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
                                            • Section BH 1(3B): inserted, on , by section 3 of the Secondary Legislation Act 2021 (2021 No 7).
                                            • Section BH 1(4) heading: replaced, on , by section 7(1) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                                            • Section BH 1(4): replaced, on , by section 7(1) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                                            • Section BH 1(4B) heading: inserted, on , by section 7(1) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                                            • Section BH 1(4B): inserted, on , by section 7(1) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                                            • Section BH 1(4C) heading: inserted, on , by section 7(1) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                                            • Section BH 1(4C): inserted, on , by section 7(1) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
                                            • Section BH 1(5B) heading: inserted, on , by section 6(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                                            • Section BH 1(5B): inserted, on , by section 6(2) of the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Act 2014 (2014 No 39).
                                            • Section BH 1(7) heading: added, on , by section 5 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                                            • Section BH 1(7): added, on , by section 5 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                                            • Section BH 1 list of defined terms associated: inserted, on , by section 126 of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
                                            • Section BH 1 list of defined terms multinational top-up tax: inserted, on , by section 7(2) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).