Foreign trust numbers reveal scale of problem National wanted to keep secret

Fewer than 70 out of 11,645 New Zealand foreign trusts have reregistered under tougher new disclosure requirements with only three weeks left to go before the final deadline, the Green Party said today.

Parliamentary questions lodged by the Green Party also show that IRD has proactively de-registered 1,797 foreign trusts since February (see below).

“New disclosure requirements are finally shedding some light on this shady industry,” said Green Party Co-leader James Shaw.

“New Zealand was gaining a damaging reputation as a tax haven but National still had to be dragged kicking and screaming to review our foreign trust rules.

“Why did the Government allow this dodgy industry to boom before doing something about it?

“We’ve discovered that less than one percent of foreign trusts have re-registered three weeks out from the June 30 deadline. Close to 1,800 have proactively been de-registered by IRD.

“It’s becoming increasingly clear that New Zealand foreign trusts were being abused on a big scale.

“Nobody, except the National Government, should be surprised by this: New Zealand foreign trusts were being marketed overseas as vehicles to hide wealth, making them attractive to criminals and tax avoiders.”

The Green Party have been pushing the National Government to require greater disclosure from our secretive foreign trust industry since 2013.

“The Panama Papers gave us a glimpse of how New Zealand foreign trusts were one way to make dirty money disappear,” Mr Shaw said.

“We also found evidence of how the foreign trust industry was using its influence with senior National Government ministers to stop IRD from investigating their activities further.

“After intense public and political pressure, we’re now looking at the end of a shady little New Zealand industry.

“Holding foreign trusts to higher disclosure requirements will improve our international reputation, which is worth way more to us than the small industry that serviced them here in New Zealand,” said Mr Shaw.

 

The answers to written parliamentary questions:

What is the total number of New Zealand foreign trusts, if any, currently registered?
Revenue Minister, Hon Judith Collins: I am advised that, as at 31 May 2017, 49* foreign trusts have reregistered under the new regime which came into force on 21 February 2017. This regime requires all NZ foreign trusts to adhere to stringent guidelines in order to remain registered. Foreign trusts have until 30 June 2017 to register.

How many foreign trusts, if any, have been de-registered by IRD this year?
Revenue Minister, Hon Judith Collins: I am advised that 1,797 foreign trusts have been deregistered from 21 February 2017 (the date of enactment of the new regime) to 31 May 2017.

* Number has since been updated by IRD.

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