Geoffrey Cone Puts New Zealand Tax Rumors To Rest

Many people around the world have a distinct impression of New Zealand: an exotic land, full of wealthy people making complex financial deals. Their impression is much fancier than the more boring truth. As Geoffrey Cone points out, contrary to most people’s beliefs, New Zealand is not a tax haven. Nor are they anywhere close to it.

 

The OECD (the Organization for Economic Co-operation and Development) keeps a list of global tax havens. Spoiler alert: New Zealand is not on it. They have never been on it, and more than likely never will be. The main traits of a tax haven are that they impose little to no taxes, there is no tax transparency, and there are laws in place that inhibit the exchanging of information with other countries or governments. New Zealand does not qualify as a tax haven on any of those grounds, nor is their banking industry in the least bit secretive or private.

 

The 2002 OECD Model Agreement on Exchange of Information on Tax Matters helped create a gold standard for transparency. New Zealand was actually one of the first countries in the world to be put on this white list for having implemented the agreed upon tax standard. They demonstrate leadership in the OECD by how it handles foreign trusts and their requirements of trustees. All of these things aid in helping other governments that request information.

 

After extensive consultation, there were new rules added in 2006. Under these new rules, a New Zealand resident trustee of a foreign trust must submit a Foreign Trust Disclosure form and keep other financial records for tax purposes.

 

These other records can include details of settlements, the trust deed, details of assets, and any money the trustee receives or spends. If this trust is carried on a business, the trustee must also provide information about the business’s accounting system and charts of the account. These records must be recorded in English and any failure to adhere to these new rules can attract heavy penalties.

 

Geoffrey Cone is a trusted New Zealand lawyer who specializes in tax and trust law. He graduated with honors from the University of Otago and received a post graduate diploma in tax and trust law. He started practicing law in 1980. He created his own practice in 1999, Cone Marshall Limited, which is the only New Zealand law firm to specialize exclusively in international law and tax planning. It gives trustee and trust management services.