New Zealand’s foreign trusts were recently reported in the media in a way that paints a totally different picture than what is on the ground. Lawyer Geoffrey Cone took the time to address the state of affairs on the ground in an article that was widely circulated in most social networks. Cone disputed the claims that New Zealand was a tax haven, and explained that it does not appear on the list of all tax havens that is kept by OECD. Further, he explained that in tax havens there is no transparency and minimal or no taxes, a situation that is totally different in New Zealand.
Tax Transparency and Foreign Trusts
New Zealand appears on the white list of OECD for having implemented the 2002 OECD Model Agreement on Exchange of Information on Tax Matters. New Zealand was in fact among the first countries to appear in this list. New Zealand also demonstrates its leadership in as far as tax transparency is concerned on the way it handles its foreign trusts and the strict requirements placed on the trustees. The measures above are all meant to aid in the exchange of information with governments that make such requests.
New rules were introduced in 2006 by Michael Cullen after lengthy consultations. A resident trustee from New Zealand in a foreign trust is supposed to fill and submit an IR607 (Foreign Trust Disclosure Form), as well as keep records and financial for tax purposes in NZ. These include details of all assets and liabilities of the trust, and the money the trustee gets and spends. If they carry on a business, the trustee ought to keep information on the accounting systems, codes and charts of the account. The records must be kept in NZ and in English language to escape heavy penalties. In 2011, the powers were enhanced when the world standard money laundering legislation was enacted.
About Geoffrey Cone
Cone studied in the University of Otago, NZ and was awarded with LLB honors and a post graduate diploma in tax and trust law. Cone started off practice in Auckland, NZ from 1980 before moving to Christchurch. He became a Partner and Chairperson of all the Partners in a chief law firm. He specialized in commercial litigation and advisory work in tax and trust matters, as well as appearing before all courts as the lead counsel, the Privy Council included. Having worked in the British West Indies for about two years he returned to Auckland in 1997. In 1999, Cone established Cone Marshall Limited, his practice that specializes in international tax and trust planning. It is the only Law firm in New Zealand that specializes in these services and offers management services of trustee and trust through a number of affiliated companies.