The agreement between New Zealand and its second largest Pacific Island trading partner was signed in July by NZ Prime Minister, John Key, and his Samoan counterpart, Tuilaepa Sailele Malielegaoi.

Key said the agreement was a significant one that would further strengthen the close relationship between the two countries. “Importantly, the tax agreement represents a further extension of New Zealand’s tax treaty network into the Pacific. Once the agreement enters into force, it will bring New Zealand’s network of tax treaties to a total of 40.”

Double tax agreements help to reduce tax barriers to two-way trade and investment by preventing cross-border income being taxed twice, therefore giving certainty about how that income will be taxed. They also lower withholding taxes, making it less costly for businesses in one country to invest in the other, and assist tax administration.

The agreement will replace the existing tax information exchange agreement with Samoa, which is more limited in its scope.