If the above title seems rather bold, remember it is coming from someone who knows quite a bit about tax law – New Zealand tax lawyer, Geoffrey Cone.
The media has recently been touting New Zealand’s foreign trusts as the new “sexy” tax shelter for those who have enough assets worth protecting. However, Mr. Cone recently reported in an article that the truth is anything but “sexy”. In fact, he stated that New Zealand’s tax laws are rather mundane, much like most things relating to taxes and tax law.
Geoffrey went on to say that most tax havens impose small taxes or none at all, are non-transparent, and do not allow free-flow of financial and tax information with other governments. New Zealand, on the other hand, displays no such characteristics. In Mr. Cone’s opinion, New Zealand will never do so either.
Mr. Cone reinforced his point by citing that New Zealand was one of the first countries to support the 2002 OECD Tax Model Agreement, which enforces international tax laws. Doing so clearly shows that New Zealand has no intentions of becoming a tax haven, rather the country seeks to comply with international tax standards and to continue to cooperate with other governments when it comes to tax matters.
The country’s proactive laws in regards to foreign trusts further enhance Mr. Cone’s point of view. New Zealand fully supports both international and domestic tax transparency by supplying other countries with relevant information pertaining to foreign trustees and domestic trusts.
New Zealand’s foreign tax rules are so rigorous that they require
all foreign trustees to submit a Foreign Trust Disclosure to the IRD, as well as keep organized tax records for various New Zealand tax purposes. Some of the tax requirements, include:
Money the trustee receives and/or spends
Details of the trust’s assets and liabilities
Information about settlements and distributions
In 2011, when the world standard money laundering legislation was enhanced, New Zealand tax laws became even more strict by demanding that all tax records pertaining to New Zealand be kept within the country, as well as be recorded and documented in English. The penalties for not complying with these rules were applied to both foreign and domestic trusts and trustees as well.
According to Geoffrey Cone, New Zealand has over 30 double tax agreements, making it extremely difficult for foreigners to avoid taxes and commit tax evasion. Add to that New Zealand’s other 20 tax information exchange agreements it has with various other nations around the globe, and it is perfectly clear that this country is not even remotely considering becoming a tax haven for those who wish to escape the tax laws established within their own country.
About Geoffrey Cone
Geoffrey Cone is head of the law firm, Cone Marshall Limited, located in Auckland, New Zealand. His firm is the only one of its kind in New Zealand that provides international planning and trust management services.
Geoffrey graduated with LLB honors and a postgraduate degree in tax law from the University of Otago, New Zealand. He began his law career in 1980 in Auckland but later moved to Christchurch where he became the Chairman of Partners in a well-respected law firm. In 1997, he moved back to Auckland where he eventually founded his current law firm.