Countries generally tax their residents on their world wide income. The New Zealand competent authority can request and obtain information concerning taxes of every kind and description under the federal laws administered by the Commissioner. Web2021 forest river georgetown gt7 36k7. 5.40 The zero Australian interest withholding tax rate on interest arising in Australia and paid to unrelated New Zealand financial institutions is consistent with Australias current treaty practice, recognising that a 10percent interest withholding tax rate on gross interest derived by financial institutions may be excessive given their cost of funds. 2.217 The source rules which determine where interest arises for the purposes of this Article are set out in paragraph 7. 15percent in all other cases. requiring Australia and New Zealand to consult with each other every five years to ensure the treaty continues to operate effectively. income or other distributions which are subject to the same taxation treatment as income from shares in the country of which the distributing company is resident for the purposes of its tax. 5.82 The Convention was considered by the Commonwealth Joint Standing Committee on Treaties, which provides for public consultation in its hearings. It was negotiated in conjunction with the negotiation of the Jersey Information Exchange Agreement, which was also conducted outside the public domain. Profits from the operation of ships or aircraft for nontransport activities are treated under Article 7 (Business Profits) of the Convention in the same way as profits derived from the use of other types of substantial equipment, such as mining equipment and trucks. Similarly, the Article provides that certain features of the New Zealand tax system are not affected by its provisions. Where the Commissioner cannot ascertain the arms length consideration, it is deemed to be such an amount as the Commissioner determines. 2.190 Where the holding is so effectively connected, the dividends are to be treated as business profits and therefore subject to the full rate of tax applicable in the country in which the dividend is sourced in accordance with the provisions of Article 7 (Business Profits). 2.310 Consistent with Australias treaty practice, this Article effectively deems income, profits or gains derived by a resident of a country which, in accordance with the Convention, may be taxed in the other country, to have a source in that other country. In the above diagram, a New Zealand resident pays interest income to a third State entity that is treated as a company for Australian tax purposes. Therefore, the comparison must be made between a permanent establishment and local enterprises which are not only carrying on the same activities but are also carrying on those activities in similar circumstances.

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