Prime Minister John Key today joined Samoa Prime Minister Tuilaepa Sailele Malielegaoi in signing a double tax agreement between New Zealand and Samoa.

“The signing of this double tax agreement is significant for our countries and will further strengthen the close relationship between New Zealand and Samoa,” says Mr Key.

"New Zealand is Samoa’s second largest trading partner. The agreement will provide a platform for increased trade and investment between our two countries, and will help assist the economic development of our Pacific island neighbour.

“Importantly, the tax agreement represents a further extension of New Zealand’s tax treaty network into the Pacific. Once the agreement enters into force, it will bring New Zealand’s network of tax treaties to a total of 40,” Mr Key says.

Double tax agreements help to reduce tax barriers to two-way trade and investment by preventing cross-border income being taxed twice, therefore giving certainty about how that income will be taxed.

They also lower withholding taxes, making it less costly for businesses in one country to invest in the other, and assist tax administration. 

The agreement will replace the existing tax information exchange agreement with Samoa which is more limited in its scope.

The agreement is expected to come into force later this year.