Sharechat Logo

Trans-Tasman imputation credits issue still has a pulse

Friday 7th February 2014

Text too small?

The Australian government has agreed to make the long-vexed issue of mutually recognising trans-Tasman imputation credits on dividends a topic for review in a forthcoming white paper on tax reform.

However, just how big a topic remains to be seen. The decision rated the last paragraph in a pro forma press statement issued by Prime Minister John Key after today's meeting with his Australian counterpart, Tony Abbott, in Canberra.

In the statement, Key "welcomed Australia's decision to make mutual recognition of imputation credits a matter for discussion in Australia's Tax Reform White Paper."

Known as franking credits in Australia, imputation credits prevent the double taxation of company dividends in the hands of shareholders, when the company has already paid tax.

Businesses on both sides of the Tasman have long argued that imputation credits should be recognised by the tax authorities of one another's countries, with a significantly greater interest in the subject recently by major Australian corporates.

However, the Australian Treasury and tax authorities have never favoured the idea, which they argue would trigger substantial lost corporate tax revenue on the Australian side of the equation, reflecting the comparatively much larger Australian investment in New Zealand than vice versa.

Both countries have had the systems since the late 1980s, and the argument has continued throughout that time, without resolution.

Key also announced that foreign visitors to the Cricket World Cup, being jointly hosted by Australia and New Zealand, would only need one visa to attend the tournament, which could see them travelling to and from both countries to follow it in its entirety.

 

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report