Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

Double Tax Talks Skirt Main Trans Tasman Problem

Trans Tasman investors shouldn't expect much from the discussions aimed at resolving the so-called triangular taxation issue.

The issue now being addressed is just small part of the main problem which is causing many New Zealand companies migrate to Australia, the Employers and Manufacturers Association says.

The Australia and New Zealand governments have produced a joint discussion paper on reforming the triangular tax. Finance ministers Michael Cullen and Peter Costello meet in Sydney on Wednesday to release the discussion paper and invite public submissions.

"We applaud the work aimed at resolving this issue, said Alasdair Thompson, EMA's chief executive, "if only to highlight the inequity and importance of the underlying principles involved.

"The major problem is that New Zealand resident shareholders of Australian companies have their dividends taxed in both countries. The same applies to Australian resident shareholders investing in New Zealand companies.

"This means that when a New Zealand company's shareholders become more numerous in Australia, they vote for the company's head office to be relocated across the Tasman to avoid the double taxation of their dividends.

"In effect this is what happened with Lion Nathan and Baycorp.

"It will undoubtedly happen with other companies whether publicly listed or privately held.

"The reverse, where Australian companies migrate to New Zealand when their shareholder numbers exceed those in Australia, is far less likely.

"The present discussions only affect New Zealand resident shareholders in New Zealand companies with tax paying operations in Australia supplying the New Zealand market.

"Likewise, it affects resident Australian shareholders in Australian companies which own New Zealand based companies supplying into Australia.

"It's only the shareholders of these companies that may see their tax liability reduce.

"Its no surprise Australia does not support the full 'streaming' of imputation credits for tax paid to one or the other country, which would address the major part of the problem, as it is winning handsomely at New Zealand's expense.

"From New Zealand's perspective the 'triangular' issue is a small step but fully worth resolving."

Ends


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

ScoopPro: Helping The Education Sector Get More Out Of Scoop

The ScoopPro professional license includes a suite of useful information tools for professional users of Scoop including some specifically for those in the education sector to make your Scoop experience better. More>>

Big Tax Bill Due: Destiny Church Charities Deregistered

The independent Charities Registration Board has decided to remove Destiny International Trust and Te Hahi o Nga Matamua Holdings Limited from the Charities Register on 20 December 2017 because of the charities’ persistent failure to meet their annual return obligations. More>>

57 Million Users' Data: Uber Breach "Utterly Preventatable"

Cybersecurity leader Centrify says the Uber data breach of 57 million customer and driver records - which the ride-hailing company hid for more than a year - was “utterly preventable”. More>>

Scoop 3.0: How You Can Help Scoop’s Evolution

We have big plans for 2018 as we look to expand our public interest journalism coverage, upgrade our publishing infrastructure and offer even more valuable business tools to commercial users of Scoop. More>>

Having A Cow? Dairy Product Prices Slide For Fourth Straight Auction

Dairy product prices fell at the Global Dairy Trade auction, retreating for the fourth straight auction amid signs of increased production... Whole milk powder fell 2.7 percent to US$2,778 a tonne. More>>

ALSO:

Statistics: Butter At Record $5.67/Block; High Vegetable Prices

Rising dairy prices have pushed food prices up 2.7 percent in the year to October 2017, Stats NZ said today. This followed a 3.0 percent increase in the year to September 2017. More>>

ALSO:

Science: New Research Finds Herbicides Cause Antibiotic Resistance

New University of Canterbury research confirms that the active ingredients of the commonly used herbicides, RoundUp, Kamba and 2,4-D (glyphosate, dicamba and 2,4-D, respectively), each alone cause antibiotic resistance at concentrations well below label application rates. More>>

ALSO:

 
 
 
 
 
 
 
 
  • Bill Bennett on Tech