Around 2008 to 2012, there were numerous media reports around the world that New Zealand was a tax haven. Media outlets, including respectable ones, portrayed the country as an exotic land full of sexy thrillers and wealthy people.
Well, lawyer Geoffrey Cone gave his opinion on what the country’s tax and foreign trusts policy was. You see, Geoffrey Cone is a respected tax and trust law expert. He holds an LLB Degree from New Zealand’s the University of Otago and a post graduate diploma. He has been practicing since 1980.
Cone once worked as a litigator in British West Indies before returning to Auckland in 1997. He has vast experience in commercial litigation, trust, and advisory. In 1999, he founded his practice, Cone Marshall Limited. His firm is the only legal outfit in New Zealand that exclusively specializes in tax planning and international trust.
Firstly, he states that New Zealand was not among the countries that the Organization for Economic Co-operation and Development (OECD) classifies as tax havens. According to the organization, tax havens are countries that lack tax transparency, impose little if any nominal taxes and conceal financially and tax information with other nations.
He explains that New Zealand was among the first countries to implement OECD’s 2012 Model Agreement on Exchange of Information on Tax Matters.
The respectable tax lawyer says that New Zealand’s handling of foreign trusts and its trustee regulations is a testament to its leadership in tax transparency. These regulations assist other governments in obtaining relevant tax information.
In the wake of extensive consultation, then Minister of Finance, Michael Cullen introduced new rules in foreign tax in 2006. One of the rules requires all New Zealand resident trustees to submit forms of Foreign Trust Disclosure at the Inland Revenue Department. Further, trustees should keep financial and tax records for the department to inspect.
According to Geoffrey Cone, the country’s laws facilitate the exchange of vital tax and financial details. For example, international authorities have access to details of distributions and settlements, names and addresses of recipients, the trust’s liabilities and assets as well as trustee receipts and expenditures.
The law in New Zealand states that the above records should be reserved within the country and recorded in English. The failure of any trustee to follow these regulations calls for hefty penalties.
Cone concludes that New Zealand does not compete with tax havens. Instead, the country emulates Britain, Singapore and the United States for their exemplary tax transparency. He urges media outlets, companies and individuals to avoid eroding the country’s hard-fought reputation for tax transparency.