The New Zealand Bankers’ Association welcomes the interim report of the Australian and New Zealand Productivity Commissions on closer economic relations and a single economic market, but notes that addressing the issue of double taxation of company income was an absolute ‘must do’.
“The interim report usefully addresses many of the remaining barriers to a single economic market. However, the most significant remaining issue – that of double taxation of company income – has not been adequately addressed and is a must do for the final report,” says New Zealand Bankers’ Association chief executive Kirk Hope.
“Considerable work has already been done on the issues relating to double taxation for businesses based in either Australia or New Zealand with substantial operations in the other country.”
“These issues have been the subject of discussion and debate for more than 20 years. The combined work of the Australian and New Zealand Productivity Commissions should be a catalyst for timely change as we move toward celebrating the 30th anniversary of CER.”
“Capital should be able to flow between New Zealand and Australia seamlessly without barriers. A free and open trans-Tasman capital market would provide a substantial net benefit to the overall trans-Tasman economy.”
Allowing mutual recognition would allow shareholders resident in one country to use credits for company tax paid in the other country to offset domestic taxes. This would prevent their dividends being taxed twice.