Geoffrey Cone has come out to discredit last week’s feature on foreign trusts, which claimed that New Zealand is a tax haven. He was intrigued by the feature’s claim because there is evidence to show that New Zealand is a model of tax transparency. He pointed out that it was another attempt at misinforming the public.
Cone began by asserting that the country is not on the list of tax havens, which is maintained by the OECD. New Zealand has never and is unlikely to be on the list. For a country to be a tax haven, it must impose zero or nominal taxes. The tax system should also be shrouded in darkness, and there should be no transparency. In addition, such a country should have laws that inhibit the sharing of tax information with other governments, and the country’s private banking industry is highly secretive.
Cone posits that the 2002 OECD Model Agreement on Exchange of Information on Tax Matters is the international gold standard for transparency. A country that fails to satisfy these requirements is considered a tax haven. Geoffrey argues that New Zealand was the first country to make it to the organization’s white list. This means that it was the first country to implement all the agreed tax standards, This way, it cannot be a tax haven.
The government has continued to enhance tax transparency in all its activities. One of the important measures that the nation has put in place is its handling of requirements on foreign trusts. Cone contends that New Zealand has placed stringent checks on trustees. This action enables any foreign government to get any relevant tax information that it requests from the government of New Zealand. This information was originally reported on NZ Herald as explained in this link http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10846049
In 2006, Michael Cullen introduced new rules. The new regulations require a trustee of a foreign trust, who is a New Zealand resident, to submit a Foreign Trust Disclosure form. The trustee is also charged with the duty of keeping financial records of the foreign trust. The individual should maintain other tax related documents such as the trust deed, details of the trust’s assets and liabilities, and details of settlement and distribution. The records should also include those detailing the trustee’s revenue and expenditures. This information must be written in English and kept in New Zealand, or a substantial penalty will be charged. In 2011, New Zealand enacted a new law to eradicate money laundering. This law makes it impossible for the country to be considered a tax haven.
About Geoffrey Cone
Geoffrey Cone is an international tax and trust attorney. He is based in New Zealand where he provides his services to foreign firms operating in the country. Cone is also a specialist in wealth planning with a focus on Spain, Italy, and Latin America. The founder of Cone Marshall Limited is a graduate of the University of Otago, New Zealand.