In China, in accordance with the provisions of Chinese law, double taxation is to be eliminated as follows: The agreement replaces the double taxation agreement currently in force under the Double Taxation Relief Ordinance (China), 1986, and this ordinance is repealed. In accordance with paragraph 3 of Article 4, the competent authorities of the two Contracting States shall endeavour, by mutual agreement, in cases where a person other than a natural person is doubly resident, to determine by common accord the country of residence on the basis of the head office or principal administrative seat, the place of effective management, the place where it has its registered office or is otherwise constituted: and all other relevant factors. In the absence of such an agreement, that person is not entitled to any compensation or compensation under the revised contract. The Contracting Parties shall notify each other in writing, through diplomatic channels, of the conclusion of their constitutional and legal procedures with a view to the entry into force of the Agreement. The date of entry into force of the Agreement shall be announced on taxpolicy.ird.govt.nz/tax-treaties/china The Agreement and the Protocol on the list (the Agreement) shall enter into force in accordance with Article 28 of the Agreement. With a view to concluding an agreement on the elimination of double taxation in the field of income tax, without creating opportunities for non-taxation or tax reduction through tax evasion or avoidance (including through agreements to purchase contracts to obtain the facilities provided for in this Convention for the benefit of residents of third countries), the competent authority shall endeavour: if it considers that the objection is justified and if it is not itself in a position to reach a satisfactory solution, it shall settle the matter by mutual agreement with the competent authority of the other Contracting State with a view to tax evasion incompatible with the Convention. Any agreement reached shall be implemented without prejudice to the time limits set by the domestic law of the States Parties. The arrangements set out in the Agreement were negotiated with the Government of the People`s Republic of China for 1 or more of the purposes referred to in Article BH 1(2) of the Income Tax Law 2007. With respect to the licensed article, and in particular the definition, the trend in updating tax treaties has been to remove “the use or right to use industrial, scientific or commercial equipment” from the definition of royalties, so that such payments are taxed as corporate profits in accordance with Article 7 (i.e.
if there is a permanent establishment). In that regard, however, nothing had changed in the new agreement, so that those payments would continue to be treated as a royalty for the purposes of the Commission. Under New Zealand tax rules, these payments are taxed as sedular payments, so the effect of the agreement in this case is (again) to limit the non-resident entrepreneur`s withholding tax to 10%. For the application of this reduced rate, a special tariff certificate must be obtained. Although the scope of the CFC rules is narrower than when the income was generated in this case, the decision remains a useful guide for the interaction between the CFC rules and our double taxation treaties. It also clarifies the scope of the tax savings articles in double taxation treaties and, in this case, a New Zealand taxpayer has obtained a tax credit in New Zealand for taxes paid by its CFCs in China, and for taxes that these companies have been spared under Chinese exemptions, the agreement will enter into force in accordance with Article 28 of the agreement. The competent authorities of the Contracting States shall endeavour to eliminate by mutual agreement all difficulties or doubts arising from the interpretation or application of the Convention. They may also consult each other on the elimination of double taxation in cases not provided for in the Convention. The Double Taxation Relief (China) Ordinance 1986 (SR 1986/314) is repealed on the date of entry into force of the Agreement referred to in Article 28(1) of the Agreement. For a person other than a natural person, he or she shall be treated under the 1986 Convention as a resident of the State Party in which his or her central administration is situated. In the new DTA, this tie-breaker criterion has been abolished, which means that in situations of dual residence, the person`s place of residence can only be determined by mutual agreement between the competent authorities. In the absence of such an agreement, the person was not entitled to an exemption or exemption under the Commission.
This can be difficult and companies should therefore do their best not to be in a dual-residency position. 1. Exempt art. 23 attributable CFCs, including double taxation? Does the double taxation agreement (DTA) between New Zealand and China also extend to Hong Kong? Nothing in this Agreement shall affect the fiscal privileges of members of diplomatic missions or consular posts under the general rules of international law or the provisions of special conventions. .
