The Government must stop allowing the foreign trust industry to operate in secret here to prevent New Zealand becoming a tax haven for criminals, the Green Party said today.
New Zealand foreign trusts have again been implicated in money laundering, tax avoidance, and criminal activity following a massive document leak from a Panamanian law firm Mossack Fonseca. The documents reportedly show that New Zealand is being used by overseas investors to keep tax secrets.
“New Zealand is today being described as the ‘quiet little achiever’ as a tax haven for criminals,” Green Party finance spokesperson Julie Anne Genter said.
IRD warned the Government in 2013 about the high risks of New Zealand foreign trusts yet National has ruled out any reform to date. In an email dated March 24, 2016, IRD said, ‘In relation to the foreign trust tax rules, given wider Government priorities the Government will not be considering regulatory reform of the rules at this stage.’
“Up until now, the National Government has been happy to allow New Zealand to become a significant tax haven,” said Ms Genter.
“New Zealand's foreign trusts form part of a trillion dollar tax haven industry highlighted by a document leak from Panamanian law firm Mossack Fonseca.
“It’s time to break open our foreign trust industry to help fight global tax evasion.
“Our foreign trust laws are unsustainable. IRD has suspected this for years, and now needs to be empowered with simple, new transparency and record-keeping rules to keep the foreign trust industry here honest.
“How can we as a country work collaboratively with other countries to try and clamp down on tax avoidance by multinational companies while knowingly facilitating tax avoidance through our lax foreign trust laws?
“It's time to demand some transparency from our foreign trust regime.”
The Green Party will move to require foreign trusts in New Zealand to register and disclose more complete information on the identity of the settlors, their country of residence, related parties, and require annual financial reporting. This would enable real-time information sharing with those 40 countries New Zealand currently has double tax agreements with.
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