TAX ON INCOMES

Otago Daily Times, Issue 26544, 20 August 1947, Page 6

TAX ON INCOMES

AGREEMENT. WITH BRITAIN MR NASH’S INTENTIONS Parliamentary Reporter WELLINGTON, Aug. 19. The hope that it would be possible to make similar agreements with the United States of America, Canada, and Australia was expressed by the Minister of Finance, Mr Nash, during consideration by the House of Representatives to-day of the agreement made by New Zealand and the United Kingdom for the avoidance of double taxation and fiscal evasion. Mr C. M. Bowden (Oppn., Karori) said the agreement was an obscurely worded document which it was very difficult to understand. It was similar to one entered into by Australia and the United Kingdom. A priority right to taxation of certain incomes was established in some cases by origin of income and in others by residence of taxpayers. The principle was established that the same income was not taxable in both countries. The worst construction one could place on the agreement was that a taxpayer might be called upon to pay the higher of the two taxes, Mr Bowden said. In some cases there could be some relief from taxation, but it was Britain that was making the greater sacrifice under the agreement. One interesting section in the agreement related to shipping. It provided that taxes could be levied in a country where shipping was owned. There was need for a similar agreement between New Zealand and Australia. Mr Nash said that material had already been worked out for a similar agreement with the United States. Australia was more difficult because of the proximity of the two countries. It might be later this year, or a little longer, before there could be a complete secmence of agreements with "the United States, Canada, and Australia. There was only one purpose of the agreements, and that was to ensure that taxation was not paid twice in respect of one income.