Great news on mutual recognition of tax credits

Media statement Friday, July 18, 2008

Great news on mutual recognition of tax credits

Its great news Australia has agreed to progress work with New Zealand on the mutual recognition of imputation and franking credits, the Employers & Manufacturers Association (Northern) says.

"Dr Cullen deserves top congratulations for achieving this," said Alasdair Thompson, EMA's chief executive.

"With a large part of our economy owned by Australians, the lack of progress on this tax credits issue has meant profits made here have increasingly had the tax paid on them going to Australia.

"Dr Cullen has worked persistently on this for many years.

"The issue ultimately determines where businesses as well as shareholders pay their tax. For businesses that has increasingly been in Australia rather than New Zealand.

"Mum and dad investors have often had to pay tax on their dividends earned in Australia twice, over there as well as here.

"We have been raising this double taxation issue with successive governments for years so today's breakthrough is huge, and it took a change of government in Australia to achieve.

"The issue represents unfinished business hanging over CER for about 20 years.

"The agreement announced today opens the way for the development of a true Single Economic Market (SEM) between Australia and New Zealand.

"The news yesterday was also very welcome on the progress made to improve the portability of savings between Australian and New Zealand retirement savings schemes."

ENDS

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