Trans Tasman tax solution a positive step
Trans Tasman tax solution a step in the right direction
The Australian and New Zealand Government Agreement on Trans-Tasman Triangular Taxation is a step in the right direction, but won't go far enough to stem the flow of businesses crossing the Tasman, says Business NZ.
Chief Executive Simon Carlaw said while the Agreement is a step in the right direction, the solution favoured by the two governments ('pro-rata allocation') is less than optimal.
"The superior option was 'dividend streaming', where all tax paid in Australia would be available to provide imputation credits solely to Australian shareholders and all tax paid in New Zealand available to provide imputation credits solely to New Zealand shareholders," Mr Carlaw said.
"Dividend streaming would provide maximum benefits to both Australian and New Zealand shareholders in a similar way to establishing separate listed companies on both sides of the Tasman. In practice, we believe that the inability to 'stream' is a significant factor in encouraging New Zealand firms to relocate to Australia.
"Establishing regular meetings to focus on trans-Tasman issues is a good move; hopefully the meetings will move on to substantial issues - such as a common currency - which have the potential to impact positively on growth."