The recent media reports about New Zealand cozying up to foreign trusts within the country and offering them a safe haven to operate has not gone down well with the legal community. There seems to be a misunderstanding regarding New Zealand’s status as a tax haven for private individuals to cash in and relax which certainly is not the case. Clearing the air on the subject, lawyer Geoffrey Cone provides factual insights to the fact that the country is a model of tax transparency.
The Organization for Economic Co-operation and Development (OECD) maintains a list of possible tax havens around the globe and New Zealand has never been a feature to the said list and is more than unlikely to be a part of it. There are certain underlying factors that are considered by the OECD before giving a status of tax haven to any country. There are certain key characteristics of tax havens which include the imposition of nominal or no tax and the laws of that country prohibit from the exchange of any information with foreign governments. New Zealand as a free state does not favor any such laws, nor does it house any private secretive banking industry. New Zealand was one of the very first countries that initiated the 2002 OECD Model Agreement on Exchange of Information on Tax Matters which supports International exchange of information to administer domestic tax laws. Under the law, a New Zealand resident trustee of a foreign trust is required to keep financial and other specific records for tax purposes by the IRD and submit a Foreign Trust Disclosure Form. This includes information like details of the trust assets and liabilities, the trust deed and descriptive details of the distributions and settlements.
In its endeavor for a transparency, the country has initiated 39 double tax agreements which have been designed to reduce tax hurdles on cross-border trades. It also has signed more than 20 tax information exchange agreements with other countries to prevent cases of tax avoidance and evasion.
Geoffrey Cone and Karen Marshall are the principals of Cone Marshall, an international tax and trusts law firm established in the year 1999. Karen Marshall has been with the firm since 2005 and serves as an adviser to statutory trustee companies. Prior to Cone Marshall, Karen was working in London as a commercial litigator for almost 10 years. Geoffrey Cone has been in the legal field since 1980 and has provided trustee and trust management services to many of its clients. Cone Marshall has been working with International families and advisers over the years and has helped assist them in establishing New Zealand Trusts and companies.