The recent media coverage pertaining to New Zealand’s foreign trusts makes the country look like one that has wealthy people, exotic lands, and a complex banking system. However, this is not the case since these reports are highly overrated. This is because New Zealand isn’t a tax haven as it has widely been reported. The OECD keeps maintains a list of countries that are tax havens. New Zealand has never been featured on this list, a situation that is likely to remain for years to come.
Why New Zealand is not a Tax Haven
Countries considered as tax havens impose low or marginal income tax. There is little transparency in these countries’ banking sector. In addition, there are laws that prevent the exchange of information between government agencies, and with other governments. New Zealand doesn’t qualify since none of the aforementioned conditions apply to it. The country’s banking system is similarly transparent. The international standard for banking and tax transparency is the OECD Model Agreement on Exchange of Information, which was ratified in 2002.
The international banking law supports the exchange of information between signatory nations. This helps in the administration and enforcement of domestic tax laws. New Zealand gained attention for being among the first nations to abide by the law, something that saw it included in the OECD white list. Since then, the country has made huge strides as far as the implementation of the international tax standard is involved.
Demonstration of Leadership
One of the ways through which the country has shown leadership in financial transparency has been the meticulous manner in which foreign trusts are handled. The country similarly places stringent requirements on trustees to ensure that they comply with government agencies whenever information concerning the trusts is needed. Rules concerning tax transparency in New Zealand were introduced in 2006 following extensive consultation with various stakeholders.
Under the regulations, trustees who are New Zealand residents must surrender a Foreign Trust Disclosure form to the IRD. In addition, they are required to maintain financial records for tax purposes. These records may include details of a trust’s liabilities and assets, details of distributions and settlements, and any monies spent or received by a trustee. Geoffrey Cone is among New Zealand lawyers who are helping reinforce this regulation.
About Geoffrey Cone
Geoff is a renowned New Zealand commercial attorney. He is a principal at Cone Marshall. Mr. Cone has experienced insurmountable success within the legal field. He has practiced for close to three decades, which explains why he has a legendary status. Geoff is a renowned tax consultant with extensive knowledge about international tax planning and management. At Cone Marshall, Geoff has been instrumental in the formation of partnerships with family advisors and lawyers. This ensures that all cases handled by the firm are addressed in an expeditious manner.