Pact opens way for UAE money

By PAULA OLIVER

Hopes that the United Arab Emirates will pour more of its riches into New Zealand are high after the two countries yesterday signed an economic co-operation pact.

The double taxation agreement and co-operation pact was signed in Dubai yesterday by Finance Minister Dr Michael Cullen, who is attending the International Monetary Fund and World Bank annual meeting.

New Zealand has 27 double taxation agreements, but this is the first to be signed with a Middle Eastern country.

The UAE is New Zealand's third largest trading partner in the Middle East, and Emirates Airlines has recently started flying the transtasman route from Auckland.

Cullen said the trade relationship with UAE had a lot of potential to be developed further.

Reducing tax impediments by preventing businesses being taxed twice and giving greater certainty about taxation would help that happen, he said.

A spokesman for the Ministry of Foreign Affairs and Trade said that the UAE had a lot of investment money tagged for overseas dispersal.

It had always been interested in investing in New Zealand, but wanted a legal framework so it had the confidence to do so.

The deal signed yesterday gave it that.

It was hoped other countries in the region might also show interest.

Under the Arrangement on Trade and Economic Co-operation signed in Dubai, a joint commission will be formed.

It will meet at ministerial level to discuss trade and economic issues between the two countries.

The double taxation agreement is likely to come into effect from the next income year, and it will cover the operation of Emirates Airlines.