INDEPENDENT NEWS

Dunne: new agreement makes mockery of tax haven claims

Published: Mon 8 Oct 2012 03:31 PM
Hon Peter Dunne
Minister of Revenue
Monday 8 October 2012 Media Statement
Dunne: new agreement makes mockery of tax haven claims
Revenue Minister Peter Dunne today announced that New Zealand will be signing a multilateral convention on tax assistance later this month, as he dismissed claims that New Zealand is a tax haven for foreign trusts.
“The key identifying characteristics of tax havens are secrecy and lack of transparency. Those are simply not factors here in New Zealand.
“In fact, New Zealand’s foreign trust taxation rules and treaty exchange of information arrangements and practices were scrutinised in detail last year by the Global Forum on Transparency and Exchange of Information for Tax Purposes review and they were approved,” Mr Dunne said.
“Our legislation for taxing trusts is fully transparent. The rules were in fact introduced in the 1980s to prevent tax avoidance by New Zealand residents.
“They are also consistent with the wider international norm that a country should not tax non-residents on foreign-sourced income – in short, we don’t tax non-New Zealanders on income not earned in New Zealand,” Mr Dunne said.
However, New Zealand’s tax legislation contains effective disclosure and record-keeping requirements that ensure Inland Revenue can access full details of the trust and provide that information to tax treaty partners as required.
New Zealand will sign the Convention on Mutual Administration Assistance in Tax Matters, as amended by the 2010 Protocol, which is a multilateral treaty that opened for signature in 1988.
Formulated jointly by the OECD and the Council of Europe, the Convention will give Inland Revenue the ability to request help from other tax authorities in detecting and preventing tax evasion, and collecting outstanding tax debts from absconding taxpayers.
“This is an important step and consistent with New Zealand’s approach to tax matters, and frankly, makes a mockery of tax haven assertions,” Mr Dunne said.
New Zealand has a wide network of tax treaty partners, including 37 double tax agreements and a growing network of tax information exchange agreements.
“The Government does not want to tax people more than what is prescribed under current law, but will act firmly where tax evasion is suspected.
“Deliberately artificial tax structures designed with the purpose of defeating New Zealand’s tax laws will attract Inland Revenue’s scrutiny,” he said.
Ends

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