While a New Zealand Foreign Trust may be used as a zero tax vehicle on its own, it is also compatible with New Zealand’s International Double Tax Agreements.

In general New Zealand’s Double Tax Agreements treat the trustee of a New Zealand Foreign Trust as a New Zealand resident. In practice it is the "other state" where the income or capital gains arise that will determine whether the NZ trust may take advantage of a particular Double Tax Agreement in a particular situation.  It is understood (based on academit rather than judicial publications) that a New Zealand Foreign Trust that has the discretion to accumulate income and does so can utilise the benefits of certain Double Tax Agreements.

The practical effects of utilization of Double Tax Agreements are:-

1. A withholding tax is payable only to the country of origin on funds transferred,   

2. Double Tax Agreement use lends a level of simplicity.