New Zealand, Vietnam Ink DTA
07 August 2013
Posted by: Author: Mary Swire
Author: Mary Swire
New Zealand's Revenue Minister Todd McClay has welcomed the signing of a new double tax agreement (DTA) with Vietnam, which he says recognizes the Government's "commitment to lifting its engagement with South East Asia."
Last month, the New Zealand Government unveiled its new "NZ Inc" ASEAN Strategy, which aims at improving the country's relationships, connections, and trade and investment presence in the region.
The DTA was inked on August 5, after the conclusion of talks between the Vietnamese State President Truong Tan Sang and New Zealand's Governor-General, Sir Jerry Mateparae.
Once the deal enters into force, dividends will be subject to withholding tax at 5 percent where the beneficial owner is a company directly holding at least 50 percent of the voting power in the paying company. A 15 percent rate will apply in all other cases. The withholding tax rate for both interest and royalties will be 10 percent.
Bilateral trade in goods and services was worth NZD846m (USD662.6m) in 2012. It has gone up by 60 percent since 2008.
According to McClay, "Education, dairy, timber, and food and beverage are already significant trade areas for us. Vietnam also offers a lot of growth potential in other areas such as aviation, tourism, clean technologies, environmental management and agribusiness."
Once ratified the Vietnamese treaty will become New Zealand's 39th DTA.