International Law

New Model of Tax Transparency

by JimHanson82 .

 

Geoffrey Cone is a lawyer. He is also a partner at Cone Marshall Ltd. He specializes in the field of international trusts advisory. He mainly advises families or individuals that look to set their trust in other countries. He is based in Auckland. He holds an LLB degree from the University of Otago. He has also practiced in commercial litigations.

 

In the recent times, the media has made New Zealand’s foreign trust look so good which is not true as compared to other nations. The fact remains, it is not all that rosy in New Zealand. New Zealand does not rank any close to a tax haven, according to OECD. The main characteristics of places considered tax haven are; no tax or nominal tax imposed. Due to lack of openness, it leads to the poor flow of information with other governments. The gold standard for transparency is anchored in the 2002 OECD Model Agreement. This entails the interchange of data on tax matters. This agreement advocates for an international exchange of this data on this issues pertaining tax.

 

New Zealand has made effort to meet the required international standards. It has shown its commitment to leadership in tax transparency. It is illustrated by the handling of foreign trusts. In 2006, Michael Cullen introduced this new rules. These rules dictate that any New Zealand resident provides a Foreign Trust Disclosure form. This form, comprises of; trust deeds, details about the settlement and the addresses of the recipients. All these records must be documented and stored in New Zealand. Failure to which it attracts hefty fines.

 

In New Zealand, there are 39 double tax agreements. This enables in curbing the vice of tax evasion. It has signed an additional 20 tax exchange treaties. This will facilitate to reduce challenges of tax avoidance at the cross- border trade. In New Zealand, there is a rapid increase in the number of foreign trusts. This growth is attributed to the fact that New Zealand is considered as a safe and stable country. It is safe and stable with regard to the legal jurisprudence and a good judiciary infrastructure.

 

In New Zealand, lawyers contribute a huge chunk of the service providers. This enhances the interactions with members of International Society Trust and Estate Practitioners (STEP). All this improves the country’s reputation on tax matters. New Zealand is not a tax haven, but it surely is in the same league with countries like Singapore on tax transparency.