Denmark - New Zealand Tax Treaty

Reprint as at 10 June 1985

Double Taxation Relief (Denmark) Order 1981 (SR 1981/108) David Beattie, Governor-General

Order in Council At the Government Buildings at Wellington this 27th day of April 1981 Present: The Right Hon D MacIntyre presiding in Council Pursuant to section 294 of the Income Tax Act 1976, His Excellency the Governor-General, acting by and with the advice and consent of the Executive Council, hereby makes the following order.

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Title Giving effect to Convention

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Note Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint. A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint. This order is administered by the Inland Revenue Department. 1

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Order 1

Title This order may be cited as the Double Taxation Relief (Denmark) Order 1981.

Giving effect to Convention It is hereby declared that the arrangements specified in the Convention set out in Schedule 1 and Schedule 2, being arrangements that have been made with the Government of the Kingdom of Denmark with a view to affording relief from double taxation in relation to income tax and excess retention tax imposed under the Income Tax Act 1976 and the income taxes imposed by the Government of the Kingdom of Denmark, shall, in relation to income tax and excess retention tax imposed under that Act, and notwithstanding anything in that Act or any other enactment, have effect according to the tenor of the Convention. Clause 2: amended, on 10 June 1985, by clause 2(1) of the Double Taxation Relief (Denmark) Order 1981, Amendment No 1 (SR 1985/111).

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Schedule 1

Schedule 1 Convention between the Government of New Zealand and the Government of the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income Schedule 1 heading: amended, on 10 June 1985, by clause 2(2)(a) of the Double Taxation Relief (Denmark) Order 1981, Amendment No 1 (SR 1985/111).

The Government of New Zealand and the Government of the Kingdom of Denmark, Desiring to conclude a Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, Have agreed as follows:

Article 1 Personal Scope This Convention shall apply to persons who are residents of one or both of the Contracting States.

Article 2 Taxes Covered 1.

The existing taxes to which the Convention shall apply are: (a) in the case of New Zealand: the income tax and the excess retention tax, (hereinafter referred to as “New Zealand tax”); (b) in the case of Denmark: the income taxes to the State and to the Municipalities (hereinafter referred to as “Danish tax”). The Convention shall apply also to any identical or substantially similar taxes which are imposed after the date of signature of the Convention in addition to, or in place of, the existing taxes. The competent authorities of the Contracting States shall notify each other of any significant changes which have been made in their respective taxation laws. 3

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Article 3 General Definitions 1.

For the purposes of this Convention, unless the context otherwise requires: (a) (i) the term “New Zealand”, when used in a geographical sense, means the territory of New Zealand (including the outlying islands) but does not include the Cook Islands, Niue or Tokelau; it also includes areas adjacent to the territorial sea of the territory of New Zealand (including the outlying islands) which by New Zealand legislation and in accordance with international law have been, or may hereafter be, designated as areas over which New Zealand has sovereign rights for the purposes of exploring them or of exploring, exploiting, conserving and managing the natural resources of the sea, or of the sea-bed and subsoil; (ii) the term “Denmark” means the Kingdom of Denmark including any area outside the territorial sea of Denmark which in accordance with international law has been or may hereafter be designated under Danish laws as an area within which Denmark may exercise sovereign rights with respect to the exploration and exploitation of the natural resources of the sea-bed or its subsoil; but the term does not comprise the Faroe Islands and Greenland; (b) the terms “a Contracting State” and “the other Contracting State” mean New Zealand or Denmark as the context requires; (c) the term “person” includes an individual, a company and any other body of persons; (d) the term “company” means any body corporate or any entity which is treated as a body corporate for tax purposes;

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Article 3—continued (e)

(f) (g)

(h)

the terms “enterprise of a Contracting State” and “enterprise of the other Contracting State” mean respectively an enterprise carried on by a resident of a Contracting State and an enterprise carried on by a resident of the other Contracting State; the term “national” means any individual possessing the citizenship of a Contracting State; the term “international traffic” means any transport by a ship or aircraft operated by an enterprise of a Contracting State, except when the ship or aircraft is operated solely between places in the other Contracting State; the term “competent authority” means: (i) in the case of New Zealand, the Commissioner of Inland Revenue or his authorised representative; (ii) in the case of Denmark, the Minister for Inland Revenue, Customs and Excise or his authorised representative.

In determining for the purposes of Articles 10, 11 or 12, whether dividends, interest or royalties are beneficially owned by a resident of New Zealand, dividends, interest or royalties in respect of which a trustee is subject to tax in New Zealand shall be treated as being beneficially owned by that trustee. In the Convention, the terms “New Zealand tax” and “Danish tax” do not include any charge imposed as a penalty under the law of either Contracting State relating to the taxes to which the Convention applies. As regards the application of the Convention by a Contracting State, any term not defined therein shall, unless the context otherwise requires, have the meaning which it has under the laws of that State concerning the taxes to which the Convention applies.

Article 4 Resident 1.

For the purposes of this Convention, the term “resident of a Contracting State” means any person who, under the law of 5

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Article 4—continued

that Contracting State, is liable to taxation therein by reason of his domicile, residence, place of management or any other criterion of a similar nature. But this term does not include any person who is liable to tax in that State in respect only of income from sources in that State. Where by reason of the provisions of paragraph 1 an individual is a resident of both Contracting States, then his status shall be determined as follows: (a) he shall be deemed to be a resident of the State in which he has a permanent home available to him; if he has a permanent home available to him in both States, he shall be deemed to be a resident of the State with which his personal and economic relations are closer (centre of vital interests); (b) if the State in which he has his centre of vital interests cannot be determined, or if he has not a permanent home available to him in either State, he shall be deemed to be a resident of the State in which he has an habitual abode; (c) if he has an habitual abode in both States or in neither of them, he shall be deemed to be a resident of the State of which he is a national; (d) if he is a national of both States or of neither of them, the competent authorities of the Contracting States shall settle the question by mutual agreement. Where by reason of the provisions of paragraph 1 a person other than an individual is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which its place of effective management is situated.

Article 5 Permanent Establishment 1.

For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on. The term “permanent establishment” includes especially:

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Article 5—continued (a) (b) (c) (d) (e) (f) 3.

a place of management; a branch; an office; a factory; a workshop, and a mine, an oil or gas well, a quarry or any other place of extraction of natural resources. A building site or construction or installation project constitutes a permanent establishment only if it lasts more than twelve months. Notwithstanding the preceding provisions of this Article, the term “permanent establishment” shall be deemed not to include: (a) the use of facilities solely for the purpose of storage, display or delivery of goods or merchandise belonging to the enterprise; (b) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of storage, display or delivery; (c) the maintenance of a stock of goods or merchandise belonging to the enterprise solely for the purpose of processing by another enterprise; (d) the maintenance of a fixed place of business solely for the purpose of purchasing goods or merchandise or of collecting information, for the enterprise; (e) the maintenance of a fixed place of business solely for the purpose of carrying on, for the enterprise, any other activity of a preparatory or auxiliary character; (f) the maintenance of a fixed place of business solely for any combination of activities mentioned in subparagraphs (a) to (e), provided that the overall activity of the fixed place of business resulting from this combination is of a preparatory or auxiliary character. An enterprise of a Contracting State shall be deemed to have a permanent establishment in the other Contracting State if: (a) it carries on supervisory activities in that other State for more than twelve months in connection with a building 7

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Article 5—continued

site or construction or installation project which is being undertaken in that other State; or (b) it carries on activities in that other State for more than twelve months in connection with the exploration or exploitation of the sea-bed and subsoil and their natural resources situated in that other State. Notwithstanding the provisions of paragraphs 1 and 2, where a person—other than an agent of an independent status to whom paragraph 7 applies—is acting on behalf of an enterprise and has, and habitually exercises, in a Contracting State an authority to conclude contracts in the name of the enterprise, that enterprise shall be deemed to have a permanent establishment in that State in respect of any activities which that person undertakes for the enterprise, unless the activities of such person are limited to those mentioned in paragraph 4 which, if exercised through a fixed place of business, would not make this fixed place of business a permanent establishment under the provisions of that paragraph. An enterprise shall not be deemed to have a permanent establishment in a Contracting State merely because it carries on business in that State through a broker, general commission agent or any other agent of an independent status, provided that such persons are acting in the ordinary course of their business. The fact that a company which is a resident of a Contracting State controls or is controlled by a company which is a resident of the other Contracting State, or which carries on business in that other State (whether through a permanent establishment or otherwise), shall not of itself constitute either company a permanent establishment of the other.

Article 6 Income From Immovable Property 1.

Income derived by a resident of a Contracting State from immovable property (including income from agriculture or

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Article 6—continued

forestry) situated in the other Contracting State may be taxed in that other State. The term “immovable property” shall have the meaning which it has under the law of the Contracting State in which the property in question is situated. The term shall in any case include property accessory to immovable property, livestock and equipment used in agriculture and forestry, rights to which the provisions of general law respecting landed property apply, usufruct of immovable property and rights to variable or fixed payments as consideration for the working of, or the right to work, mineral deposits, sources and other natural resources; ships, boats and aircraft shall not be regarded as immovable property. The provisions of paragraph 1 shall apply to income derived from the direct use, letting, or use in any other form of immovable property. The provisions of paragraphs 1 and 3 shall also apply to the income from immovable property of an enterprise and to income from immovable property used for the performance of independent personal services.

Article 7 Business Profits 1.

The profits of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in the other State but only so much of them as is attributable to that permanent establishment. Subject to the provisions of paragraph 3, where an enterprise of a Contracting State carries on business in the other Contracting State through a permanent establishment situated therein, there shall in each Contracting State be attributed to that permanent establishment the profits which it might be expected to make if it were a distinct and separate enterprise engaged in the same 9

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Article 7—continued

or similar activities under the same or similar conditions and dealing wholly independently with the enterprise of which it is a permanent establishment. In determining the profits of a permanent establishment, there shall be allowed as deductions expenses which are incurred for the purposes of the permanent establishment, including executive and general administrative expenses so incurred, whether in the State in which the permanent establishment is situated or elsewhere. Insofar as it has been customary in a Contracting State to determine the profits to be attributed to a permanent establishment on the basis of an apportionment of the total profits of the enterprise to its various parts, nothing in paragraph 2 shall preclude that Contracting State from determining the profits to be taxed by such an apportionment as may be customary; the method of apportionment adopted shall, however, be such that the result shall be in accordance with the principles contained in this Article. No profits shall be attributed to a permanent establishment by reason of the mere purchase by that permanent establishment of goods or merchandise for the enterprise. For the purposes of the preceding paragraphs, the profits to be attributed to the permanent establishment shall be determined by the same method year by year unless there is good and sufficient reason to the contrary. Where profits include items of income which are dealt with separately in other Articles of this Convention, then the provisions of those Articles shall not be affected by the provisions of this Article.

Article 8 Shipping and Air Transport 1.

Profits of an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State.

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Article 8—continued 2.

The provisions of paragraph 1 shall also apply to profits derived from the participation in a pool, a joint business or an international operating agency. With respect to profits derived by the Danish, Norwegian and Swedish air transport consortium, known as the Scandinavian Airlines System (SAS), the provisions of paragraph 1 shall only apply to such part of the profits as corresponds to the shareholding in the consortium held by Det Danske Luftfartsselskab (DDL), the Danish partner of Scandinavian Airlines System (SAS).

Article 9 Associated Enterprises 1.

Where (a) an enterprise of a Contracting State participates directly or indirectly in the management, control or capital of an enterprise of the other Contracting State, or (b) the same persons participate directly or indirectly in the management, control or capital of an enterprise of a Contracting State and an enterprise of the other Contracting State, and in either case conditions are made or imposed between the two enterprises in their commercial or financial relations which differ from those which would be made between independent enterprises, then any profits which would, but for those conditions, have accrued to one of the enterprises, but, by reason of those conditions, have not so accrued, may be included in the profits of that enterprise and taxed accordingly. Where a Contracting State includes in the profits of an enterprise of that State—and taxes accordingly—profits on which an enterprise of the other Contracting State has been charged to tax in that other State and the profits so included are profits which would have accrued to the enterprise of the first-mentioned State if the conditions made between the two enterprises had been those which would have been made between independent enterprises, then that other State shall make an appro11

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Article 9—continued priate adjustment to the amount of the tax charged therein on those profits. In determining such adjustment, due regard shall be had to the other provisions of this Convention and the competent authorities of the Contracting States shall if necessary consult each other.

Article 10 Dividends 1.

Dividends paid by a company which is a resident of a Contracting State to a resident of the other Contracting State may be taxed in that other State. However, such dividends may also be taxed in the Contracting State of which the company paying the dividends is a resident and according to the laws of that State, but if the recipient is the beneficial owner of the dividends the tax so charged shall not exceed 15 percent of the gross amount of the dividends. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation. This paragraph shall not affect the taxation of the company in respect of the profits out of which the dividends are paid. The term “dividends” as used in this Article means income from shares and other income assimilated to income from shares by the taxation law of the Contracting State of which the company making the distribution is a resident. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the dividends, being a resident of a Contracting State, carries on business in the other Contracting State of which the company paying the dividends is a resident, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the holding in respect of which the dividends are paid is effectively connected with such permanent establishment or fixed base. In such case the provisions of Article 7 or Article 14, as the case may be, shall apply. Where a company which is a resident of a Contracting State derives profits or income from the other Contracting State,

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Article 10—continued

that other State may not impose any tax on the dividends paid by the company except insofar as such dividends are paid to a resident of that other State or insofar as the holding in respect of which the dividends are paid is effectively connected with a permanent establishment or a fixed base situated in that other State, nor subject the company’s undistributed profits to a tax on undistributed profits, even if the dividends paid or the undistributed profits consist wholly or partly of profits or income arising in such other State. Where an individual who is a resident of New Zealand receives from a company which is a resident of Denmark a dividend to which he is beneficially entitled and which, if received by a resident of Denmark, would entitle the resident to the Danish tax credit (skattegodtgørelse)— (a) the individual shall be entitled to the credit subject to the deduction of tax that would apply if that credit were a dividend; (b) the amount of the credit shall be treated for purposes of New Zealand tax as assessable income from sources in Denmark.

Article 11 Interest 1. 2.

Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. However, such interest may also be taxed in the Contracting State in which it arises and according to the laws of that State, but if the recipient is the beneficial owner of the interest the tax so charged shall not exceed 10 percent of the gross amount of the interest. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation. The term “interest” as used in this Article means income from debt-claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from government securities 13

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Article 11—continued

and income from bonds or debentures, including premiums and prizes attaching to such securities, bonds or debentures. However, this term does not include income dealt with in Article 10. Penalty charges for late payment shall not be regarded as interest for the purpose of this Article. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the interest, being a resident of a Contracting State, carries on business in the other Contracting State in which the interest arises, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the debt-claim in respect of which the interest is paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply. Interest shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the interest, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the indebtedness on which the interest is paid was incurred, and such interest is borne by such permanent establishment or fixed base, then such interest shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the interest, having regard to the debt-claim for which it is paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

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Article 12 Royalties 1. 2.

Royalties arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. However, such royalties may also be taxed in the Contracting State in which they arise and according to the laws of that State, but if the recipient is the beneficial owner of the royalties the tax so charged shall not exceed 10 percent of the gross amount of the royalties. The competent authorities of the Contracting States shall by mutual agreement settle the mode of application of this limitation. The term “royalties” as used in this Article means payments of any kind received as a consideration for the use of, or the right to use, any copyright of literary, artistic or scientific work including cinematograph films, films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, any patent, trade mark, design or model, plan, secret formula or process, or for the use of, or the right to use, industrial, commercial, or scientific equipment, or for information concerning industrial, commercial or scientific experience. The provisions of paragraphs 1 and 2 shall not apply if the beneficial owner of the royalties, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties arise, through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right or property in respect of which the royalties are paid is effectively connected with such permanent establishment or fixed base. In such case, the provisions of Article 7 or Article 14, as the case may be, shall apply. Royalties shall be deemed to arise in a Contracting State when the payer is that State itself, a political subdivision, a local authority or a resident of that State. Where, however, the person paying the royalties, whether he is a resident of a Contracting State or not, has in a Contracting State a permanent establishment or a fixed base in connection with which the liability to pay the royalties was incurred, and such royalties are borne by 15

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Article 12—continued

such permanent establishment or fixed base, then such royalties shall be deemed to arise in the State in which the permanent establishment or fixed base is situated. Where, by reason of a special relationship between the payer and the beneficial owner or between both of them and some other person, the amount of the royalties, having regard to the use, right or information for which they are paid, exceeds the amount which would have been agreed upon by the payer and the beneficial owner in the absence of such relationship, the provisions of this Article shall apply only to the last-mentioned amount. In such case, the excess part of the payments shall remain taxable according to the laws of each Contracting State, due regard being had to the other provisions of this Convention.

Article 13 Alienation of Property 1.

Income or gains derived by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other State. Income or gains from the alienation of movable property forming part of the business property of a permanent establishment which an enterprise of a Contracting State has in the other Contracting State or of movable property pertaining to a fixed base available to a resident of a Contracting State in the other Contracting State for the purpose of performing independent personal services, including such income or gains from the alienation of such a permanent establishment (alone or with the whole enterprise) or of such fixed base, may be taxed in that other State. Income or gains of an enterprise of a Contracting State from the alienation of ships or aircraft operated in international traffic or movable property pertaining to the operation of such ships or aircraft, shall be taxable only in that State.

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Article 13—continued 4.

Income or gains from the alienation of any property other than that referred to in paragraphs 1, 2 and 3, shall be taxable only in the Contracting State of which the alienator is a resident.

Article 14 Independent Personal Services 1.

Income derived by an individual who is a resident of a Contracting State in respect of professional services or other activities of an independent character shall be taxable only in that State unless such services are performed in the other Contracting State and (a) the individual is present in the other State for a period or periods exceeding in the aggregate 183 days in the income year concerned for the purpose of performing his activities, or (b) the individual has a fixed base regularly available to him in the other State for the purpose of performing his activities. In such cases, the income may be taxed in that other State but only so much of it as is attributable to activities connected with that fixed base or performed during such period or periods. The term “professional services” includes, especially, independent scientific, literary, artistic, educational or teaching activities as well as the independent activities of physicians, lawyers, engineers, architects, dentists and accountants.

Article 15 Dependent Personal Services 1.

Subject to the provisions of Articles 16, 18, 19 and 20, salaries, wages and other similar remuneration derived by a resident of a Contracting State in respect of an employment shall be taxable only in that State unless the employment is exercised in the other Contracting State. If the employment is so exercised, such remuneration as is derived therefrom may be taxed in that other State.

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Article 15—continued 2.

Notwithstanding the provisions of paragraph 1, remuneration derived by a resident of a Contracting State in respect of an employment exercised in the other Contracting State shall be taxable only in the first-mentioned State if: (a) the recipient is present in the other State for a period or periods not exceeding in the aggregate 183 days in the income year concerned, and (b) the remuneration is paid by, or on behalf of, an employer who is not a resident of the other State, and (c) the remuneration is not borne by a permanent establishment or a fixed base which the employer has in the other State. Notwithstanding the preceding provisions of this Article, remuneration derived in respect of an employment exercised aboard a ship or aircraft operated in international traffic by an enterprise of a Contracting State may be taxed in that Contracting State. Where a resident of Denmark derives remuneration in respect of an employment exercised aboard an aircraft operated in international traffic by the Scandinavian Airlines System (SAS) Consortium, such remuneration shall be taxable only in Denmark.

Article 16 Directors’ Fees Directors’ fees and other similar payments derived by a resident of a Contracting State in his capacity as a member of the board of directors of a company which is a resident of the other Contracting State may be taxed in that other State.

Article 17 Artistes and Athletes 1.

Notwithstanding the provisions of Articles 14 and 15, income derived by a resident of a Contracting State as an entertainer, such as a theatre, motion picture, radio or television artiste, or a musician, or as an athlete, from his personal activities as

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Article 17—continued

such exercised in the other Contracting State, may be taxed in that other State. Where income in respect of personal activities exercised by an entertainer or an athlete in his capacity as such accrues not to the entertainer or athlete himself but to another person, that income may, notwithstanding the provisions of Articles 7, 14 and 15, be taxed in the Contracting State in which the activities of the entertainer or athlete are exercised.

Article 18 Pensions 1.

Subject to the provisions of paragraph 2 of Article 19, pensions and other similar remuneration paid to a resident of a Contracting State in consideration of past employment shall be taxable only in that State. Notwithstanding the provisions of paragraph 1, pensions and other payments made under the social security legislation of a Contracting State may be taxed in that State.

Article 19 Government Service 1.

(a)

(b)

Remuneration, other than a pension, paid by a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. However, such remuneration shall be taxable only in the other Contracting State if the services are rendered in that State and the individual is a resident of that State who: (i) is a national of that State; or (ii) did not become a resident of that State solely for the purpose of rendering the services.

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Article 19—continued 2.

(a)

(b)

Any pension paid by, or out of funds created by, a Contracting State or a political subdivision or a local authority thereof to an individual in respect of services rendered to that State or subdivision or authority shall be taxable only in that State. However, such pension shall be taxable only in the other Contracting State if the individual is a resident of, and a national of, that State.

The provisions of Articles 15, 16 and 18 shall apply to remuneration and pensions in respect of services rendered in connection with a business carried on by a Contracting State or a political subdivision or a local authority thereof.

Article 20 Students Payments which a student or business apprentice who is or was immediately before visiting a Contracting State a resident of the other Contracting State and who is present in the first-mentioned State solely for the purpose of his education or training receives for the purpose of his maintenance, education or training shall not be taxed in that State, provided that such payments arise from sources outside that State.

Article 21 Other Income Items of income of a resident of a Contracting State not dealt with in the foregoing Articles of this Convention shall be taxable only in that State except that, if such income is derived from sources within the other Contracting State, it may also be taxed in that other State.

Article 22 Methods of Elimination of Double Taxation 1.

In the case of New Zealand, double taxation shall be avoided as follows:

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Article 22—continued (a)

Subject to any provisions of the law of New Zealand which may from time to time be in force and which relate to the allowance of a credit against New Zealand tax of tax paid in a country outside New Zealand (which shall not affect the general principle hereof), Danish tax paid under the law of Denmark and consistently with this Convention, whether directly or by deduction, in respect of income derived by a New Zealand resident from sources in Denmark (excluding, in the case of a dividend, tax paid in respect of the profits out of which the dividend is paid) shall be allowed as a credit against New Zealand tax payable in respect of that income; (b) For the purposes of this Article, income of a resident of New Zealand which in accordance with the provisions of this Convention may be taxed in Denmark shall be deemed to arise from sources in Denmark. In the case of Denmark double taxation shall be avoided as follows: (a) Subject to the provisions of subparagraph (c), where a resident of Denmark derives income which, in accordance with the provisions of this Convention may be taxed in New Zealand, Denmark shall allow as a deduction from the tax on the income of that resident, an amount equal to the income tax paid in New Zealand; (b) Such deduction in either case shall not, however, exceed that part of the income tax as computed before the deduction is given, which is attributable to the income which may be taxed in New Zealand; (c) Where a resident of Denmark derives income which, in accordance with the provisions of this Convention shall be taxable only in New Zealand, Denmark may include this income in the tax base, but shall allow as a deduction from the income tax that part of the income tax which is attributable to the income derived from New Zealand.

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Article 23 Mutual Agreement Procedure 1.

Where a resident of a Contracting State considers that the actions of one or both of the Contracting States result or will result for him in taxation not in accordance with the provisions of this Convention, he may, irrespective of the remedies provided by the domestic law of those States, present his case to the competent authority of the Contracting State of which he is a resident. This case must be presented within three years from the first notification of the action giving rise to taxation not in accordance with the provisions of the Convention. The competent authority shall endeavour, if the objection appears to it to be justified and if it is not itself able to arrive at a satisfactory solution, to resolve the case by mutual agreement with the competent authority of the other Contracting State, with a view to the avoidance of taxation which is not in accordance with the Convention. The competent authorities of the Contracting States shall endeavour to resolve by mutual agreement any difficulties or doubts arising as to the interpretation or application of the Convention. They may also consult together for the elimination of double taxation in cases not provided for in the Convention. The competent authorities of the Contracting States may communicate with each other directly for the purpose of giving effect to the provisions of the Convention.

Article 24 Exchange of Information 1.

The competent authorities of the Contracting States shall exchange such information as is necessary for carrying out the provisions of this Convention or of the domestic laws of the Contracting States concerning taxes covered by the Convention insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Article 1. Any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be

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Article 24—continued

disclosed only to persons or authorities (including courts and administrative bodies) involved in the assessment or collection of, the enforcement or prosecution in respect of, or the determination of appeals in relation to, the taxes covered by the Convention. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. In no case shall the provisions of paragraph 1 be construed so as to impose on a Contracting State the obligation: (a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State; (b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State; (c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information, the disclosure of which would be contrary to public policy (ordre public).

Article 25 Diplomatic Agents and Consular Officers Nothing in this Convention shall affect the fiscal privileges of diplomatic agents or consular officers under the general rules of international law or under the provisions of special international agreements.

Article 26 Territorial Extension 1.

This Convention may be extended, either in its entirety or with any necessary modifications: (a) to any territory for whose international relations New Zealand is responsible which imposes taxes substantially similar in character to those to which the Convention applies; and

Schedule 1

Double Taxation Relief (Denmark) Order 1981

Reprinted as at 10 June 1985

Article 26—continued (b)

to any part of the territory of Denmark which is specifically excluded from the application of the Convention and which imposes taxes substantially similar in character to those to which the Convention applies. Any such extension shall take effect from such date and subject to such modifications and conditions (including conditions as to termination) as may be specified and agreed between the Contracting States in notes to be exchanged through diplomatic channels or in any other manner in accordance with their constitutional procedures. Unless otherwise agreed by both Contracting States, the termination of the Convention by one of them under Article 28 shall also terminate, in the manner provided for in that Article, the application of the Convention to any territory, or to any part of any territory, to which it has been extended under this Article.

Article 27 Entry into Force 1.

The Contracting States shall notify each other that the constitutional requirements for the entry into force of this Convention have been complied with. This Convention shall enter into force on the date of the latter of the notifications referred to in paragraph 1 and its provisions shall have effect: (a) in New Zealand: in respect of income assessable for the income year beginning on 1 April 1981 and subsequent years; (b) in Denmark: in respect of income arising on or after 1 January 1981 and subsequent years.

Article 28 Termination This Convention shall remain in force until terminated by a Contracting State. Either Contracting State may terminate the Convention, 24

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Schedule 1

Article 28—continued through diplomatic channels, by giving notice of termination at least six months before the end of any calendar year beginning after the year 1984. In such event, the Convention shall cease to have effect: (a) in New Zealand: in respect of income assessable for the income year beginning on 1 April in the calendar year next following that in which the notice of termination is given, and subsequent years; (b) in Denmark: in respect of income arising for the calendar year next following that in which the notice of termination is given, and subsequent years.

IN WITNESS WHEREOF the undersigned, duly authorised thereto, have signed the present Convention.

DONE in duplicate at Copenhagen this 10th day of October 1980 in the English language.

For the Government of New Zealand Brian Talboys

For the Government of the Kingdom of Denmark Kjeld Olesen

Schedule 1

Double Taxation Relief (Denmark) Order 1981

Reprinted as at 10 June 1985

Protocol to the Convention between the Government of New Zealand and the Government of the Kingdom of Denmark for the avoidance of double taxation with respect to taxes on income and the prevention of fiscal evasion. At the signing of the Convention concluded today between the Government of New Zealand and the Government of the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, the undersigned have agreed upon the following additional provisions which shall form an integral part of the said Convention. It is agreed that: (a) for the purposes of sub-paragraph (a) of paragraph 1 of Article 2, the New Zealand income tax does not include the bonus issue tax; (b) nothing in Articles 7 and 21 shall apply to either Contracting State to prevent the operation in the Contracting State of any provisions of its law at any time in force relating to the taxation of any income from the business of any form of insurance provided that if the law in force in either Contracting State at the date of signature of this Convention relating to the taxation of that income is varied (otherwise than in minor respects so as not to affect its general character), the Contracting States shall consult each other with a view to agreeing to such amendment of this paragraph as may be appropriate; (c) if, at any time after the date of signature of this Protocol, New Zealand shall include an Article on non-discrimination in any of its double taxation conventions, the Government of New Zealand shall without undue delay inform the Government of the Kingdom of Denmark and shall enter into negotiations with the Government of the Kingdom of Denmark with a view to including such an Article in the present Convention.

DONE in duplicate at Copenhagen this 10th day of October 1980 in the English language.

Reprinted as at 10 June 1985

Double Taxation Relief (Denmark) Order 1981

Schedule 1

Protocol—continued For the Government of New Zealand Brian Talboys

For the Government of the Kingdom of Denmark Kjeld Olesen

Schedule 2

Double Taxation Relief (Denmark) Order 1981

Reprinted as at 10 June 1985

Schedule 2 Second Protocol to the Convention between the Government of New Zealand and the Government of the Kingdom of Denmark for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income Schedule 2: added, on 10 June 1985, by clause 2(2)(b) of the Double Taxation Relief (Denmark) Order 1981, Amendment No 1 (SR 1985/111).

The Government of New Zealand and the Government of the Kingdom of Denmark, Desiring to conclude a second Protocol to the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income signed at Copenhagen on 10 October 1980, Have agreed as follows:

Article 1 The following new Article 22A (Non-Discrimination) shall be inserted after Article 22 (Methods of Elimination of Double Taxation):

Article 22A Non-Discrimination 1.

Nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances are or may be subjected. For the purposes of this Article the term “nationals” means: (a) all individuals possessing the citizenship of a Contracting State; (b) all legal persons, partnerships and associations deriving their status as such from the laws in force in a Contracting State. The taxation on a permanent establishment which an enterprise of a Contracting State has in the other Contracting State

Reprinted as at 10 June 1985

Double Taxation Relief (Denmark) Order 1981

Schedule 2

Article 22A—continued

shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities. Except where the provisions of paragraph 1 of Article 9 (Associated Enterprises), paragraph 6 of Article 11 (Interest), or paragraph 6 of Article 12 (Royalties) apply, interest, royalties and other disbursements paid by a resident of a Contracting State to a resident of the other Contracting State shall, for the purposes of determining the taxable profits of the first-mentioned resident, be deductible under the same conditions as if they had been paid to a resident of the first-mentioned State. Enterprises of a Contracting State, the capital of which is wholly or partly owned or controlled, directly or indirectly, by one or more residents of the other Contracting State, shall not be subjected in the first-mentioned State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which enterprises of the first-mentioned State carrying on the same activities, the capital of which is owned or controlled by residents of the first-mentioned State, are or may be subjected. This Article shall not apply to any provision of the taxation laws of a Contracting State which: (a) is reasonably designed to prevent or defeat the avoidance or evasion of taxes; or (b) is in force on the date of signature of this Protocol, or is substantially similar in general purpose or intent to any such provision but is enacted after that date; provided that any such provision (except where that provision is in an international agreement) does not allow for different treatment of residents or nationals of the other Contracting State as compared with the treatment of residents or nationals of any third State. Nothing in this Article shall be construed as preventing a Contracting State from distinguishing in its taxation laws between residents and non-residents solely on the basis of their residence and to levy taxes or grant exemption, relief, reduction or allowance for tax purposes accordingly. 29

Schedule 2

Double Taxation Relief (Denmark) Order 1981

Reprinted as at 10 June 1985

Article 22A—continued 8.

In this Article the terms “taxation” and “taxes” mean the taxes to which this Convention applies.

The Contracting States shall notify each other through diplomatic channels that the constitutional requirements for the entry into force of this Protocol have been complied with. This Protocol, which shall form an integral part of the Convention, shall enter into force on the date of the later of the notifications referred to in paragraph 1 and its provisions shall have effect: (a) in New Zealand: for any income year beginning on or after 1 April in the calendar year next following the date on which this Protocol enters into force; (b) in Denmark: in respect of income arising on or after 1 January in the calendar year next following the date on which this Protocol enters into force.

Article 2

DONE at Copenhagen this 12th day of March 1985 in the English language.

For the Government of New Zealand T C Obrien

For the Government of the Kingdom of Denmark Peter Dyvig

P G Millen, 30

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Double Taxation Relief (Denmark) Order 1981

Clerk of the Executive Council.

Issued under the authority of the Acts and Regulations Publication Act 1989. Date of notification in Gazette: 30 April 1981.

Notes

Double Taxation Relief (Denmark) Order 1981

Reprinted as at 10 June 1985

Contents 1 General 2 Status of reprints 3 How reprints are prepared 4 Changes made under section 17C of the Acts and Regulations Publication Act 1989 5 List of amendments incorporated in this reprint (most recent first)

Notes 1

General This is a reprint of the Double Taxation Relief (Denmark) Order 1981. The reprint incorporates all the amendments to the order as at 10 June 1985, as specified in the list of amendments at the end of these notes. Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order. For more information, see http://www.pco.parliament.govt.nz/reprints/.

Status of reprints Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint. This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

How reprints are prepared A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked

Reprinted as at 10 June 1985

Double Taxation Relief (Denmark) Order 1981

Notes

are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force. 4

Changes made under section 17C of the Acts and Regulations Publication Act 1989 Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted. A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint. In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint: • omission of unnecessary referential words (such as “of this section” and “of this Act”) • typeface and type size (Times Roman, generally in 11.5 point) • layout of provisions, including: • indentation • position of section headings (eg, the number and heading now appear above the section) • format of definitions (eg, the defined term now appears in bold type, without quotation marks) • format of dates (eg, a date formerly expressed as “the 1st day of January 1999” is now expressed as “1 January 1999”)

Double Taxation Relief (Denmark) Order 1981

Notes

• • •

•

• •

Reprinted as at 10 June 1985

position of the date of assent (it now appears on the front page of each Act) punctuation (eg, colons are not used after definitions) Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly case and appearance of letters and words, including: • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter) • small capital letters in section and subsection references are now capital letters schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly running heads (the information that appears at the top of each page) format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

List of amendments incorporated in this reprint (most recent first) Double Taxation Relief (Denmark) Order 1981, Amendment No 1 (SR 1985/111)

Wellington, New Zealand: Published under the authority of the New Zealand Government—2011

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