The New Zealand media reports of last week’s events on foreign trust sound exciting, at least superficially. Well, to be honest, anything to do with the taxation process is boring to anyone. Let’s just dive into the main issue here; New Zealand is no tax haven. Our banking system is not as secretive. We pay a lot in taxes (tax havens impose little or no taxes to its citizens), and there are no specific laws or regulation barring the country from exchanging information with other nations. There is a lot of transparency in our governance, a characteristic not associated with tax havens. So yeah New Zealand fails to qualify as a tax haven in all fronts. You won’t even find our country’s name on the list of OECD’s list of tax havens.
Exchange of Information
Our country provides relevant tax data to countries that request it. New Zealand was among the first countries to assent to the 2002 OECD Model Agreement on Exchange of Information on Tax Matters, the worldwide gold standard for transparency. OECD Model Agreement on Exchange of Information on Tax Matters is in support of international exchange of information to govern or impose domestic tax laws. The country continues to demonstrate global leadership in tax transparency in many ways, for instance, the way it foreign trust is handled.
To preserve financial and related data for New Zealand tax purposes, a New Zealand resident trustee of a foreign trust is needed by the IRD to submit a Foreign Trust Disclosure form (IR607). These rules were introduced in 2006 by Michael Cullen. The world standard money laundering legislation further increased these rules in 2011. All data must be recorded in English and stored within New Zealand.
New Zealand has more than 20 tax information exchange agreements with other nations and 39 double tax agreements; all meant to minimize incidences of tax evasion, tax avoidance, to reduce tax impediments in foreign investments and cross-border trade, succession planning and asset protection. New Zealand provides a safe place for assets for any citizen of the world. The country’s reputation should not be ruined by putting too much emphasis on an occasional scoundrel individual.
About Geoffrey Cone
Geoffrey Cone has an LLB Honours in Law from the University of Otago, New Zealand. In addition to that, he holds a tax and trust diploma from the same university. His law firm, Cone Marshall Limited was established in 1999 and is based in Auckland, New Zealand. Cone Marshall Limited specializes in tax planning and international trust. Prior to starting his law firm, Geoffrey practiced in tax and trust advisory work as well as commercial litigation at British West Indies.