However, the treaty allows U.S. emigrants to avoid double taxation of their income in New Zealand by allowing them to benefit from U.S. tax credits if they file their return on the same value as New Zealand income taxes they already paid when filing their U.S. tax returns. All DBAs include the POP as a low-cost dispute resolution mechanism. As a general rule, the POP only provides for the relevant authorities to work to resolve the problem. However, some POPs provisions are supplemented by arbitration provisions to eliminate cases where the relevant authorities are unable to reach an agreement. Please note the second protocol of the 1982 agreement. If you are a U.S.
citizen or permanent resident, you are required to file U.S. taxes with the IRS each year, regardless of the country in which you reside. In addition to the normal income tax return, you may also be required to file a return of information about your assets in foreign bank accounts, either professionally or personally. While the United States taxes the international income of its citizens and permanent residents living abroad, it has special provisions to protect them from double taxation, including: 4. The competent authorities of the contracting states can communicate directly with each other to reach an agreement within the meaning of the previous paragraphs. (d) if he is a citizen of either state or one, the competent authorities of the contracting states try to clarify the issue by mutual agreement. The U.S.-New Zealand tax contract provides for double taxation on income tax, corporation tax and capital gains tax, but a clause called a savings clause in Article 1, paragraph 3, states that “the United States can tax the non-resident source tax rate at 15% and could be reduced under the double taxation agreement between these countries. 2. The competent authority endeavours to resolve the matter by mutual agreement with the competent authority of the other State party, by mutual agreement, where the objection appears to be well founded and is not in a position to find a satisfactory solution to resolve the matter in agreement with the competent authority of the other contracting State, in order to avoid tax evasion which is not in accordance with the convention.