30 June 2017
Banks required to share customer information under new tax law
New tax law that comes into force on 1 July will require banks to provide Inland Revenue with tax information for
certain customers.
The new law, aimed at reducing global tax evasion, means that banks and other financial institutions will need to
identify accounts held by foreign tax residents. They will then have to report information about those customers to
Inland Revenue, which will in turn share that information with other countries’ tax agencies that are party to the
information sharing agreement.
The tax information sharing scheme is reciprocal, and other countries will report to Inland Revenue on New Zealand tax
residents in their jurisdictions.
“The policy behind this legal requirement is designed to combat tax evasion around the world. The banking industry
supports that goal,” says New Zealand Bankers’ Association chief executive Karen Scott-Howman.
“It means that banks may ask existing customers to confirm if they are tax residents in countries other than New
Zealand. It also means that banks will ask new customers after 1 July to self-certify their country or countries of tax
residence.”
Under the law, customers identified as foreign tax residents will need to provide banks with their date of birth and
foreign taxpayer identification number.
The so-called ‘Automatic Exchange of Information’ (AEOI) adopts the Common Reporting Standard (CRS) to share information
among participating countries.
At this stage Inland Revenue will be sharing information with 58 other jurisdictions. The information must be reported
to Inland Revenue by 30 June every year, with the first exchange of information taking place in 2018.
A factsheet for customers who hold or control accounts at banks and other financial institutions is available from
Inland Revenue at:
More information about AEOI is available at:
ENDS