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6 J. Australasian Tax Tchrs. Ass'n 1 (2011)
The Impact of OECD Membership upon New Zealand's International Tax Policy and DTA Negotiations - A Comparative Text Analysis

handle is hein.journals/jautta6 and id is 5 raw text is: Journal of the Australasian Tax Teachers Association 2011 Vol.6 No.1 THE IMPACT OF OECD MEMBERSHIP UPON NEW ZEALAND'S INTERNATIONAL TAX POLICY AND DTA NEGOTIATIONS -A COMPARATIVE TEXT ANALYSIS ANDREW M C SMITH AND ADRIAN J SAWYER* ABSTRACT The Organisation for Economic Cooperation and Development (OECD) has played a significant role in the area of taxation since its inception in 1961. Among its contributions to international tax coordination was the release of a draft model tax convention, revised many times subsequently, which has been adopted by many countries as a template for them to negotiate their double tax agreements (DTAs) from. New Zealand was not one of the founding members of the OECD. New Zealand joined the OECD in 1973, following Australia in 1971 and Japan in 1964. New Zealand's later entry into the OECD after the Draft Model Convention first appeared in 1963 provides an interesting opportunity to examine the extent that OECD membership has influenced New Zealand's DTA negotiations and international tax policy, using as a primary analysis tool a computer based text comparison programme. The results obtained show that prior to joining the OECD none of New Zealand's DTAs were based on the OECD Model. Only after it joined the OECD and entered its reservations to the 1977 version of the OECD Model did that Model have any influence upon New Zealand's DTA negotiations. Now nearly forty years on since joining, New Zealand has a network of 37 DTAs, most of which are based upon the OECD Model. Despite this, all of these DTAs depart in some areas from the OECD Model, the reasons for which are analysed further in this article. Overall it appears the OECD Model has assisted New Zealand's DTA negotiations enabling it also to enjoy the benefits flowing from the international acceptance of the Commentaries as a tool for interpretation. The OECD Model may have also made it harder for New Zealand to negotiate DTAs with articles that differ substantially from international tax norms and has probably been a factor behind some of the latest changes to New Zealand's international tax rules. * Associate Professor Andrew M C Smith, Corresponding Author of this paper, School of Accounting and Commercial Law, Victoria University of Wellington, P 0 Box 600, Wellington, New Zealand, Email: andrew.smith@vuw.ac.nz; Professor Adrian J Sawyer, Department of Accounting and Information Systems, University of Canterbury, Private Bag 4800, Christchurch, New Zealand, Email: adrian-sawver(canterhurvc.n7..