The U.S.-New Zealand tax treaty covers double taxation with respect to income tax, corporate tax, and capital gains tax, but a clause that Article 1(3) designates as an interest clause states that “the United States may tax all DTAs that contain map as a dispute resolution mechanism at a lower cost. As a general rule, the MAGP only provides that the competent authorities shall endeavour to resolve the problem. However, some provisions of the MAGP are supplemented by arbitration clauses aimed at eliminating cases where competent authorities fail to reach an agreement. The agreement has several objectives, the most important of which is the availability of double taxation relief. To facilitate this objective, the two national legislative bodies, the New Zealand Income Tax Act and the United States Internal Revenue Code, refer to the treaty. Please respect the Second Protocol to the 1982 Convention. DTAS offers more relief from double taxation than national law. The agreement includes provisions for the taxation of certain categories of occupations and income, including: the United States is among the few governments to tax international income received by its citizens and by permanent residents residing abroad. However, certain provisions contribute to protection against possible double taxation. This implies that the withholding tax rate for non-residents is flat-rate 15% and could be reduced under the double taxation convention between these countries.
The agreement, however, allows U.S. expats to avoid double taxation of their income generated in New Zealand by allowing them to claim U.S. tax credits when they file their U.S. tax return at the same value as the New Zealand taxes they have already paid when they file their U.S. tax return. There is no aggregation agreement, it could be an area where Americans living in New Zealand could be subject to double taxation. U.S. expats can get more information about the New Zealand system from the U.S.
Social Security Administration. The invokability of the Tie-Breaker Rule for U.S. resident aliens, including lawful permanent residents, is technically permissible, but may not be discouraged. Legitimate permanent residents, including green card holders, who then attempt to naturalize in the United States, may encounter difficulties during this process if they have interrupted their residency for tax purposes in previous years. As a result, the tie-breaker rule should be applied with the utmost caution – in all situations.. . . .