Contrary to what the media has been making New Zealand’s foreign trusts policy look like, New Zealand is not becoming a tax haven. The truth is actually nothing in even close to such a story. In reality, New Zealand’s tax situation is the same as most other countries’ tax situation; boring and uneventful.
The New Zealand government isn’t quite sure where people got the idea that they are a tax haven from, but they are adamant about correcting the perception. The OECD (Organization for Economic Co-operation and Development) keeps a list of all countries that could be classified as ‘tax havens’. Tax havens are characterized as having no imposed or nominal taxes, they lack transparency, and they have laws and procedures that inhibit the exchange of information with other countries. Considering these key characteristics, New Zealand doesn’t come close to qualifying as a tax haven. They don’t even have any form of secretive, private banking.
New Zealand actually takes pride in its tax transparency. According to the 2002 OECD Model Agreement on Exchange of Information on Tax Matters, New Zealand is one of the leading countries to embrace transparency. The OECD Model Agreement supports the exchange of tax information between governments. Due to New Zealand’s forward thinking, it was one of the first countries the OECD placed on its white list.
The countries new foreign trusts policy required any persons having a foreign trust must submit a Foreign Trust Disclosure form and have financial and other records at hand. The other records may include documents such as the trust deed, details of settlements and distributions, any details about the trust’s assets and liabilities, and any money the trustee is receiving and spending. If the trust is business related, the trustee must keep records that pertain to the accounting system.
New Zealand has one of the most advanced tax systems in the world with 39 double tax agreements. This extreme system reduces tax impediments and prevents tax avoidance and tax evasion. With such an effective system, the trust lawyers and accountants of New Zealand are rather remarkable. They specialize in dealing with international clients, which elevates the country’s reputation with the OCED.
One of those remarkable lawyers is Geoffrey Cone. Geoffrey has spent decades working in the tax industry and knows how things work. He graduated with LLB honors from the University of Otago. He also has a post-graduate degree in tax and trust law. His career started shortly afterward when he began working in Auckland. He worked there for a while before moving to Christchurch where he became a partner and the Chairman of Partners.