Taxation in New Zealand
It is normal for citizens to pay tax since it is a primary source of revenue for the government. However, other citizens fail to file for tax payment hence lack of transparency. According to an article published on November 9th, 2012, lawyer Geoffrey Cone explains the transparency of taxation in New Zealand. Through the media coverage, tax in New Zealand is portrayed as transparent and accessible although it is a complicated process.
Geoffrey explains that New Zealand is not a tax haven. Talking of tax havens, such dockets do not impose any tax in addition to the lack of transparency. In most tax havens, the government together with the law withhold vital tax information. New Zealand; therefore, does not qualify as a tax haven as it does not house a secretive banking industry to horde information.
According to the OECD Model law on Exchange of Tax Information, the level of clarity on tax supports the international exchange of information for law administration. New Zealand ranked top in the countries marked by OCED. Having implemented the internationally agreed tax standard, New Zealand has demonstrated exemplary leadership. The state handles foreign trusts and trustees requirements transparently. The collected information is channeled to various governments that need relevant tax information.
After extensive research in 2006, Michael Cullen introduced new tax rules. The rules stated that a resident trustee from New Zealand is required to submit the Foreign Trust Disclosure form known as IR607 to the IRD. Another rule indicated that the foreigners must file financial records in addition to other vital records for taxation. These are the critical documents required for filing by the New Zealand Tax Department:
- Trust Deed
- Settlement and distribution details
- Details of assets and liabilities
- Money received
- Money spent
- Accounting information
According to the tax department, all records must be stored in New Zealand and recorded in English. All rules must be observed without which, a trustee is subjected to weight penalties. The world standard money laundering legislation enacted the law in 2011, and up to date, it is observed. New Zealand has approximately 39 tax laws contracted to reduce tax impediments. The tax agreements assist in the prevention of tax avoidance in addition to fraud.
About Geoffrey Cone
Mr. Cone is a tax advisor and owner of Cone Marshall Limited, the only New Zealand firm that specializes in foreign trust and tax planning. Geoffrey graduated with LLB honors from the University of Otago in New Zealand. He established Cone Marshall in 1999 after extensive research on tax evasion, tax avoidance, and transparency. Cone Marshall provides trustee and trust management through its affiliates.