Minister responds to tax haven suggestion

The Minister of Revenue has responded to suggestions that New Zealand is a tax haven after revelations of the use of New Zealand-registered foreign-controlled trusts uncovered by a massive leak of documents that are being called “the Panama Papers”.

The documents all relate to the records over more than 40 years of a Panamanian law firm, Mossack Fonseca.

In a media release on 4 April 2016, the Minister, the Hon Michael Woodhouse, said that New Zealand has a very sound tax system with world-class tax rules and stated as follows:

“We tax people who live, work and do business here. We don’t tax foreign income earned by foreigners. The same principles apply to trusts, and have done since 1988.

It is ridiculous to suggest that New Zealand is a tax haven, as tax havens thrive on secrecy.

Our tax rules require foreign trusts to be registered. We also have a strong tax treaty network, with the express purpose of discovering and preventing tax avoidance by exchanging information between tax jurisdictions.

We have an ongoing responsibility to ensure these rules are robust so we can comply with our international obligations.

The OECD has looked at our foreign trust rules in the past and had no concerns with them. The tax treatment of foreign trusts may come up in the OECD’s Base Erosion and Profit Shifting work programme in which case we would look at our own rules in the context of everyone else’s.

New Zealand has also been a very active participant in the OECD and G20 work to combat tax avoidance. We continue to be a strong voice in this area.”

Source: www.beehive.govt.nz

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