The new double tax agreement between New Zealand and Canada is set to facilitate investment and trade between the two nations, New Zealand Revenue Minister Todd McClay said Thursday, reports the Shanghai Daily.

The new Treaty will lower withholding taxes on dividends, interest and royalties between the two countries commencing Aug. 1st, 2015.

“For businesses, tax agreements provide greater certainty and reduce the likelihood of being taxed twice on cross-border transactions, while investors will generally be better off as a result of lower withholding taxes on their cross-border investment returns,” McClay said in a statement.

Under the agreement, the withholding tax rate on dividends would fall from 15 per cent to a maximum of five per cent for an investor who holds a minimum of 10 per cent of the shares in the dividend-paying company.

The withholding rate on royalties would fall from 15 per cent to 10 per cent generally, with a further reduced rate of five per cent for royalties on copyright, computer software, and other specified items.

The withholding rate on interest payments would be lowered from 15 percent to a maximum of 10 percent.

“Canada is an important investment and trading partner for New Zealand. The new tax agreement updates and modernizes the 1980 agreement between our two countries and is testament to the strong relationship we continue to share,” said McClay.