Issues in the Qualification of Taxable Entities and Treaty Protection: The New Zealand IFA Report to the Mumbai Congress (October 2014)
IFA Cahiers de droit fiscal international (Mumbai Congress Subject 2) 2014
42 Pages Posted: 6 Mar 2014
Date Written: November 1, 2013
Abstract
This is the New Zealand Report on subject 2 to the IFA Congress on the Qualification of Taxable Entities and Treaty Protection. It considers the questions raised by the General Reporters and concludes: 1) New Zealand is likely to rely on entity qualification in a manner broadly consistent with the OECD Partnership Report; 2) Treaty entitlement: Entity qualification is primarily determined by the liability to tax in the residence jurisdiction. 3) Distributive rules: Entity qualification is primarily determined by the liability to tax in the residence jurisdiction. 4) Employment income: the State of source is significant in the application of Article 15. 5) Directors’ fees: The State of residence of the entity is significant in the application of Article 16. 6) Foreign tax credits: The New Zealand treaty network makes it clear that the foreign tax credit under article 23 is subject to the domestic tax credit rules in subpart LJ of the New Zealand Income Tax Act 2007.
Keywords: Hybrid entities, partnership report, treaty entitlement, distributive rules, employment income, directors fees, foreign tax credits
JEL Classification: K34
Suggested Citation: Suggested Citation