10 December 2003 Media Statement

NZ signs double tax agreement with Chile

Chile today became the first Latin American country with which New Zealand has signed a double tax agreement.

The signing took place in Wellington between Chile’s Minister of Finance, Nicolas Eyzaguirre, and New Zealand Finance and Revenue Minister Michael Cullen.

“This is a significant event. Chile is one of New Zealand’s longest standing and closest friends in Latin America, a region with which we want to strengthen our business links,” Dr Cullen said.

New Zealand’s exports to Chile in the year to June included dairy, seeds and some chemical products, for a total value of about NZ$33 million. Chilean exports to New Zealand for the same period consisted mainly of grapes, wine and copper, valued at NZ$31 million.

“The DTA will complement the Closer Economic Partnership (CEP) agreement being negotiated between Chile, Singapore and New Zealand. The CEP offers considerable strategic benefits for all three partners, building a bridge between Latin America, the Pacific and Asia,” Dr Cullen said.

Double tax agreements reduce impediments to cross-border trade and investment by preventing businesses being taxed twice, providing greater certainty of tax treatment, lowering taxes on some income and reducing compliance costs for some activities. They also help tax administrations to detect and prevent tax evasion.

New Zealand is party to 27 such agreements.

The DTA between Chile and New Zealand will come into force once both parties have completed domestic procedures to give legal effect to it, which in New Zealand’s case will require an Order in Council.

The text of the agreement is published at www.taxpolicy.ird.govt.nz.

ENDS

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