Avoid double taxation by ensuring that in the event of an adjustment of transfer prices in one state, an adjustment is made in another state; and, with respect to the licence clause, and in particular the definition, when updating tax treaties, there was a tendency to remove from the definition of royalties “the use or right to use commercial, scientific or commercial equipment,” so that these payments are taxed as corporate profits in accordance with Article 7 (i.e. where there is a stable institution). However, the new agreement has not changed and these payments will continue to be considered royalties for DBA purposes. Under New Zealand`s tax rules, these payments are taxed as staggered payments, so that, in this case, the contract limits (yet) the withholding tax of the non-resident contractor to 10%. To apply this reduced rate, a special price certificate is required. A new double taxation agreement (DBA) between the People`s Republic of China and New Zealand was signed on 1 April 2019. This agreement, if it is in force, will replace a 1986 agreement and, therefore, will put in place modern tax legislation for cross-border economic activities. For a person other than a person, the person is treated as a resident of the State party in which his seat is located, in accordance with the 1986 agreement. In the new DBA, this Tiebreaker test has been removed, so that, in dual residence situations, the person`s residence can only be determined in mutual agreement between the competent authorities. In the absence of such an agreement, the person is not entitled to an exemption granted by the DBA.
This can be difficult and companies should therefore do their best not to be in a double stay situation. Countries with which the Philippines currently has double taxation conventions (DBAs): it may be worth noting that while the existing 1986 DBA is a “covered agreement” within the meaning of the multilateral convention for the implementation of related measures to prevent base erosion and profit transfer (MLI), China`s position on the subject in relation to New Zealand meant that many new articles of 1986 would not apply to the 1986 DBA. For example, not all changes to the institution`s articles apply (artificial prevention through commission regimes, specific exemptions and contract splitting).