Agreement between the Government of New Zealand and the Government of the Cook Islands on the allocation of taxing rights with respect to certain income of individuals and to establish a mutual agreement procedure in respect of transfer pricing adjustments
The Government of New Zealand and the Government of the Cook Islands (
“the Contracting Parties”),
Having regard to the principles underpinning the special relationship of partnership and free association between the Contracting Parties,
Recognising that the Contracting Parties have concluded an Agreement on the Exchange of Information with Respect to Taxes, and
Desiring to conclude an Agreement for the allocation of taxing rights with respect to certain income of individuals and to establish a mutual agreement procedure in respect of transfer pricing adjustments,
Have agreed as follows:
This Agreement shall apply to persons who are residents of one or both of the Contracting Parties.
2 This Agreement shall also apply to any identical or substantially similar taxes which are imposed after the date of signature of this Agreement in addition to, or in place of, the existing taxes. The competent authorities of the Contracting Parties shall notify each other within a reasonable period of time of any substantial changes to the taxation laws covered by this Agreement.
2 As regards the application of this Agreement at any time by a Contracting Party, any term not defined therein shall, unless the context otherwise requires, have the meaning that it has at that time under the law of that Contracting Party, for the purposes of the taxes to which this Agreement applies, with any meaning under the applicable tax laws of that Contracting Party prevailing over a meaning given to the term under other laws of that Contracting Party.
3 Where by reason of the preceding provisions of this Article a person, being an individual, is a resident of both Parties, then the person's status shall be determined as follows:
(a) the individual shall be deemed to be a resident only of the Contracting Party in which a permanent home is available to that individual; if a permanent home is available in both Parties, or in neither of them, that individual shall be deemed to be a resident only of the Contracting Party with which the individual's personal and economic relations are closer (centre of vital interests);
(a) Salaries, wages and other similar remuneration, other than a pension, paid by a Contracting Party to an individual in respect of services rendered to that Contracting Party shall be taxable only by that Contracting Party.
(b) However, such salaries, wages and other similar remuneration shall be taxable only by the other Contracting Party if the services are rendered in that Contracting Party and the individual is a resident of that Contracting Party who did not become a resident of that Contracting Party solely for the purpose of rendering the services.
2 Notwithstanding the provisions of paragraph 1, salaries, wages and other similar remuneration in respect of services rendered in connection with any trade or business carried on by a Contracting Party may be taxed in accordance with the laws of that Contracting Party.
Payments which a student or business apprentice who is or was immediately before visiting a Contracting Party a resident of the other Contracting Party and who is temporarily present in the first-mentioned Contracting Party solely for the purpose of their education or training receives for the purpose of their maintenance, education or training shall not be taxed by that Contracting Party, provided such payments arise from sources outside that Contracting Party.
Mutual agreement procedure in respect of transfer pricing adjustments
1 Where a resident of a Contracting Party considers the actions of the other Contracting Party result or will result in a transfer pricing adjustment not in accordance with the arm’s length principle, the resident may, irrespective of the remedies provided by the domestic law of those Parties, present a case to the competent authority of the first-mentioned Contracting Party. The case shall be presented within 3 years of the first notification of the adjustment.
Exchange of information
The competent authorities of the Contracting Parties shall exchange such information as is forseeably relevant for carrying out the provisions of this Agreement. Information may be exchanged by the competent authorities for the purposes of this Article in accordance with the provisions of the Agreement between the Government of the Cook Islands and the Government of New Zealand for the Exchange of Information with Respect to Taxes (whether or not this Agreement, in whole or in part, forms part of the domestic law of either Contracting Party).
Entry into force
The Contracting Parties shall notify each other, in writing, through the appropriate channel of the completion of their constitutional and legal procedures for the entry into force of this Agreement. This Agreement shall enter into force on the date of the last notification, and shall, provided the Agreement between the Government of the Cook Islands and the Government of New Zealand for the Exchange of Information with Respect to Taxes is in force, thereupon have effect:
3 Notwithstanding the provisions of paragraph 1 or 2, this Agreement shall, on receipt through the diplomatic channel of written notice of termination of the Agreement for the Exchange of Information with Respect to Taxes between the Contracting Parties, terminate and cease to be effective on the first day of the month following the expiration of a period of 3 months after the date of receipt of such notice.