Tax Agreement with Viet Nam now in force

New Zealand's new double tax agreement with Viet Nam has now come into force, Revenue Minister Todd McClay announced today.

“The new double tax agreement (DTA) which was signed in August 2013 brings our network of tax agreements to 39 DTAs. It also increases our DTA coverage amongst our trading partners in the ASEAN region.

“In line with DTAs with our other trading partners, the new agreement will give businesses greater certainty over the tax treatment of cross-border investment income, reduce compliance costs for both New Zealand and Vietnamese investors, and will lower withholding tax rates on dividends, interest and royalties,” Mr McClay said.

Mr McClay said that double tax agreements helped encourage growth in economic ties between countries and promote cross-border trade by preventing businesses and individuals from being taxed twice on income earned in the other country. They also encourage investment by reducing withholding tax rates on interest and dividends.

"Extending and maintaining our network of double tax agreements is a priority for the government as DTAs play an important role in removing obstacles to cross-border trade and investment”.

Mr McClay said that double tax agreements were also a highly effective means for closing the net on avoidance and evasion.

The full text of the New Zealand-Viet Nam double tax agreement is available at www.taxpolicy.ird.govt.nz.