Relief from paying tax twice
DTAs give more relief from double taxation than is available under domestic law.
- One way DTAs prevent double taxation is by giving one country or territory the right to tax certain income and exempting it in the other state.
- Another way is allowing tax credits where both countries or territories tax the same income.
DTAs may, for example, be relevant if you're a:
- non-resident taxpayer in New Zealand and earn income here
- New Zealand tax resident and earn income in another country or territory
- tax resident in New Zealand and another country or territory.
If there is no tax treaty between New Zealand and the other country or territory, the normal domestic rules apply.
Many DTAs are being updated as part of a global effort to combat tax practices that abuse or exploit DTAs to minimise tax in inappropriate ways.
Countries and territories that have a DTA with New Zealand
You'll find the DTAs currently in force on our 'Tax Policy' site.
DTAs for different countries or territories are not the same. You'll need to check the DTA to be sure how it applies or consult a tax professional.
Work out your tax residency status
You'll need to know your tax residency status. This will help you understand how New Zealand's tax laws and DTAs apply to you. In New Zealand, you'll either be a:
- non-resident taxpayer
- New Zealand tax resident.
You'll also need to know your overseas tax residency status.
Tax relief for your situation
Once you work out your tax residency status, you can see how DTAs may affect how certain types of income are taxed. It's also possible to be a tax resident in both New Zealand and another country or territory.
Certificates of residency and tax relief forms
Before granting benefits under a treaty to New Zealand tax residents, some DTA countries or territories require either:
- certificates of residency
- tax relief forms.
Mutual agreement procedure (MAP)
All DTAs include the MAP as a low-cost dispute resolution mechanism. The MAP usually only provides for the respective competent authorities to endeavour to resolve the issue. However, some MAP provisions are being supplemented with arbitration provisions to eliminate cases where competent authorities are unable to reach agreement.
Another recent change being increasingly rolled out across DTAs is to allow a taxpayer to raise a MAP case with either competent authority.