Contrary to popular belief, New Zealand is not a tax haven. As lawyer Geoffrey Cone points out, the OECD (Organization for Economic Co-operation and Development) keeps a list of tax havens around the globe and New Zealand has never been and probably never will be on it.
Tax havens are places that impose only nominal taxes or no taxes at all, they lack a transparency and the laws in that place obstruct the exchange of information with any other government. Because of those definitions, New Zealand doesn’t qualify as a tax haven in any form, nor do they have a secretive banking industry.
The standard for tax transparency in the OCED model supports the exchange of information to enforce or create domestic tax laws. New Zealand was one of the first global locations to be added to the list for implementing the agreed upon tax standard.
New Zealand is in fact a leader in tax transparency. It demonstrates its leadership in how it handles foreign trusts and the necessities put on trustees. All of these requirements assist other governments that request any information.
There have been new rules added to this area in 2006. A New Zealand resident trustee of a foreign trust is required to submit an IR607 (a Foreign Trust Disclosure) and to also keep other records for New Zealand tax functions. The other records required include the trust deed, details of assets and liabilities, details of settlements, and any money that the trustee in question receives or uses. Additionally, accounting system records must be kept if the trust is carried on a business.
All of these records are kept in New Zealand and must be recorded in English. Failure to follow any of these rules and regulations can result in serious penalties. The power behind these regulations was heightened in 2001 when the enactment of a world standard money laundering legislation was passed.
This information has been passed on by Geoffrey Cone, founder of the firm Cone Marshall Limited. Geoffrey graduate from the University of Otago with honors and a degree in tax and trust law. He began practicing law in 1980 in Auckland, and then later moved to Christchurch where he became a partner in a leading Australian law firm.
He practiced in commercial litigation in addition to tax and trust advisory work. He appeared in the court system at all levels as a leading counsel. After working for two years in the British West Indies as a litigator, he returned to his practice in Auckland in 1997. In 1999, he decided to establish his own firm, Cone Marshall Limited. His firm is the only one in New Zealand that specializes in international trust and tax planning and it also has affiliated companies in which they provide trustee and trust management services.