Convention, With Protocol, Signed at Wellington July 23, 1982; 　　Transmitted by the President of the United States of America to the Senate August 13, 1982 (Treaty Doc. No. 97-27, 97th Cong., 2d Sess.); 　　Reported Favorably by the Senate Committee on Foreign Relations July 11, 1983 (S. Ex. Rept. 　　No. 98-15, 98th Cong., 1st Sess.); 　　Advice and Consent to Ratification by the Senate July 27, 1983; 　　Ratified by the President August 23, 1983; 　　Ratified by New Zealand October 18, 1983; 　　Ratifications Exchanged at Washington November 2, 1983; 　　Proclaimed by the President December 5, 1983; 　　Entered into Force November 2, 1983. GENERAL EFFECTIVE DATE UNDER ARTICLE 27: 2 NOVEMBER 1983 TABLE OF ARTICLES Article 1----------------------------------General Scope Article 2----------------------------------Taxes Covered Article 3----------------------------------General Definitions Article 4----------------------------------Residence Article 5----------------------------------Permanent Establishment Article 6----------------------------------Income from Real Property Article 7----------------------------------Business Profits Article 8----------------------------------Shipping and Air Transport Article 9----------------------------------Associated Enterprises Article 10---------------------------------Dividends Article 11---------------------------------Interest Article 12---------------------------------Royalties Article 13---------------------------------Alienation of Property Article 14---------------------------------Independent Personal Services Article 15---------------------------------Dependent Personal Services Article 16---------------------------------Limitation on Benefits Article 17---------------------------------Artistes and Athletes Article 18---------------------------------Pensions and Annuities Article 19---------------------------------Government Service Article 20---------------------------------Students Article 21---------------------------------Other Income Article 22---------------------------------Relief from Double Taxation Article 23---------------------------------Non-discrimination Article 24---------------------------------Mutual Agreement Procedure Article 25---------------------------------Exchange of Information and Administrative Assistance Article 26---------------------------------Diplomatic Agents and Consular Officers Article 27---------------------------------Entry into Force Article 28---------------------------------Termination Protocol-----------------------------------of 23 July, 1982 Letter of Submittal-----------------------of 31 July, 1982 Letter of Transmittal---------------------of 13 August, 1982 The "Saving Clause"---------------------Paragraph 3 of Article 1 　　　　　TAX CONVENTION WITH NEW ZEALAND AND RELATED PROTOCOL 　　　　　　　　　　　　　　MESSAGE 　　　　　　FROM THE PRESIDENT OF THE UNITED STATES 　　　　　　　　　　　　　TRANSMITTING 　　A CONVENTION BETWEEN THE UNITED STATES OF AMERICA AND NEW ZEALAND FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME, TOGETHER WITH A RELATED PROTOCOL, SIGNED AT WELLINGTON ON JULY 23, 1982 LETTER OF SUBMITTAL DEPARTMENT OF STATE, Washington, D.C., July 31, 1982. 　　THE PRESIDENT: I have the honor to submit to you, with a view to its transmission to the Senate for advice and consent to ratification, the Convention between the United States of America and New Zealand for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, together with a related Protocol, signed at Wellington on July 23, 1982. 　　The Convention is based to a large extent on the United States draft model income tax convention published by the Department of the Treasury in June 1981 and the OECD model published in January 1977. It takes into account changes in the income tax laws and tax treaty policies of the two countries. 　　With respect to taxes on investment income, the Convention provides for limits on the tax at sources as follows: 15 percent on dividends, 10 percent on interest (except interest paid to the other government or to a wholly-owned instrumentality of the other government, which is exempt from tax at source), and 10 percent on royalties. New Zealand agrees to apply the 15 percent rate on dividends as of April 1, 1982, the date on which its statutory rate increased to 30 percent, provided that instruments of ratification of the Convention are exchanged before April 1, 1984. This stipulation is included so that the Government of New Zealand will not have to make refunds of tax retroactively for more than two years. In the interim, before the Convention enters into force, dividends derived from New Zealand will be subject to a tentative withholding tax of 30 percent. 　　At the request of the United States, the Convention includes a provision permitting either Contracting State to tax gains derived by a resident of the other State on the disposition of an interest in real property located in the first State. 　　In addition, the Convention allows the taxation of business profits in certain cases beyond those covered in the United States model by providing a somewhat broader definition of the term "permanent establishment". For example, supervisory activities in connection with a construction site constitute a permanent establishment if carried on for longer than twelve months, and activities in connection with the exploration or extraction of natural resources constitute a permanent establishment if carried on for longer than six months in any consecutive twelve month period. 　　The rules governing the taxation of remuneration for personal services are similar to those other United States treaties, except that the 183-day threshold for taxation of employees is defined in terms of a 12-month period instead of a taxable year. 　　Unlike the existing convention of any other New Zealand income tax convention, the new Convention includes an article on non-discrimination. The article, by its terms, will not apply to income tax laws reasonably designed to prevent tax avoidance and evasion, or to tax provisions which are in force on the date of signature of the Convention (or subsequently enacted, but similar in general purpose or intent to those already in force). The non-application of the nondiscrimination article to any such tax provisions is contingent upon their not providing for different treatment between residents or citizens of the other Contracting State and residents or citizens of any third state (except where the provisions are in an international agreement). If either country considers that future taxation measures adopted by the other country infringe upon these principles, the competent authorities of the two countries will endeavor to resolve the issue. 　　The Protocol confirms certain understandings which the signatories agree are to form an integral part of the Convention. 　　The Convention will enter into force when instruments of ratification have been exchanged. Its provisions will take effect in the United States for taxable years beginning on or after the date of entry into force of the Convention, and, with respect to withholding taxes, on amounts paid on or after the first day of the second month following the date of entry into force. In New Zealand the provisions will take effect as of April 1, following the date of entry into force. The provisions of the existing convention will cease to apply when the corresponding provisions of the new Convention take effect. 　　A technical memorandum explaining in detail the provisions of the Convention is being prepared by the Department of the Treasury and will be submitted to the Senate Committee on Foreign Relations. 　　The Department of the Treasury, with the cooperation of the Department of State, was primarily responsible for the negotiation of the Convention. It has the approval of both Departments. Respectfully submitted, GEORGE P. SHULTZ. LETTER OF TRANSMITTAL THE WHITE HOUSE, August 13, 1982. To the Senate of the United States: 　　I transmit herewith, for Senate advice and consent to ratification, a Convention between the United States of America and New Zealand for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income together with a related Protocol, signed at Wellington on July 23, 1982. I also transmit the report of the Department of State on the Convention. 　　The Convention, based on the OECD and draft United States model income tax conventions, takes into account changes in the income tax laws and tax treaty policies of the two countries. It provides limits on the tax at source with respect to taxes on investment income and provides rules for the taxation of capital gains, business profits, personal service income and other income. It also specifies the method used to avoid double taxation and provides for administrative cooperation between the tax officials of the two countries to avoid double taxation and prevent fiscal evasion. 　　I recommend that the Senate give early and favorable consideration to the Convention and related Protocol and give advice and consent to their ratification. RONALD REAGAN. BY THE PRESIDENT OF THE UNITED STATES OF AMERICA A PROCLAMATION CONSIDERING THAT: 　　The Convention between the United States of America and New Zealand for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, together with a related Protocol, was signed at Wellington on July 23, 1982, the text of which is hereto annexed; 　　The Senate of the United States of America by its resolution of July 27, 1983, two-thirds of the Senators present concurring therein, gave its advice and consent to ratification of the Convention, together with the related Protocol; 　　The Convention, together with the related Protocol, was ratified by the President of the United States of America on August 23, 1983, in pursuance of the advice and consent of the Senate, and was ratified on the part of New Zealand; 　　The instruments of ratification of the Convention and related Protocol were exchanged at Washington on November 2, 1983, and accordingly the Convention entered into force on November 2, 1983, its provisions to have effect as specified in Article 27; 　　NOW, THEREFORE, I, Ronald Reagan, President of the United States of America, proclaim and make public the Convention and related Protocol to the end that they be observed and fulfilled with good faith on and after November 2, 1983, by the United States of America and by the citizens of the United States of America and all other persons subject to the jurisdiction thereof. 　　IN TESTIMONY WHEREOF, I have signed this proclamation and caused the Seal of the United States of America to be affixed. 　　DONE at the city of Washington this fifth day of December in the year of our Lord one thousand nine hundred eighty-three and of the Independence of the United States of America the two hundred eighth. By the President: RONALD REAGAN GEORGE P. SHULTZ Secretary of State