New Zealand Tightens Tax Regulations

New Zealand is not described as tax sanctuary, according to the OECD it is not on their list, it has never been, and it is not expected to be on the list shortly. To be listed in OECD, a nation must have certain features including that the country must execute no or minimal taxes; there must be transparency, and their laws impede the exchange of information with other governments. New Zealand does not have the characteristics, and it also does not have a highly private financial industry to be named a tax haven.

 

It is well known that the gold standard of transparency is 2002 OECD Model Agreement on Exchange of Information on Tax Matters. The transparency is well known to back the global exchange of data for the purpose of controlling domestic taxation.

 

Though New Zealand is not considered as a tax haven, it has managed to be transparent in their leadership, and it has done this through the handling of foreign trust as well as the requirements placed on their foreign trustees that go towards assisting other governments. After an extensive research and consultation, Michael Cullen introduced new rules in 2006. The new regulations stated that all the New Zealand residents trust trustee of a foreign trust must submit a Foreign Trust Disclosure form (IR607) as well as keeping their financial and tax records for the country’s tax records as required by the IRD.

 

Some of the requirements listed down by the IRD include the residents’ details of settlement and distribution, trust assets and liability details, trust deeds, as well as the income and the expenditure of the trustee. It is also required if the trustee owns a business they must keep and provide their accounts statements. The New Zealand government also requires that all the records must be maintained in the country and specifically in English. The policy was enacted in 2011 by the enactment of world standard money laundering legislation and failure to follow the rules the residents face a fine.

 

New Zealand is known to have about 39 tax contract; the agreements benefits the nation in the reduction of tax obstructions to cross-border trades and investments as well as in the helping to cube those invading tax payment. The country has made all efforts to see their revenue goes up each year and it has made over 20 agreements with other governments.

 

Geoffrey Cone is a renowned tax lawyer who started his career after he graduated from the University of Otago New Zealand with LLB and he is also a Diploma Holder in Tax and Trust Law. His first practice in Auckland in 1980 and he later moved to Christchurch where he served as a partner and a Chairman of Partners in a law firm. Cone established his practice in 1999, Cone Marshall Limited after he worked in West Indies as a litigator for two years. His Law firm offers global tax and trust planning as well as the provision of trust and trustees management services to associated companies.

 

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