Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Foreign trusts must be broken open

7 September 2012

Foreign trusts must be broken open

Revenue Minister Peter Dunne tonight endorsed tax avoidance as a legitimate practice when challenged about the use of secret New Zealand foreign trusts as a tax haven.

TV3's 60 minutes highlighted problems with the trusts and Mr Dunne responded that the behaviour was "legitimate tax avoidance".

"Mr Dunne's repeated reference to legitimate tax avoidance was astounding. The tax system is being undermined by the minister in charge of it," Green Party co-leader Russel Norman said.

"New Zealand’s foreign trusts form part of a trillion dollar tax haven industry that should be transparent to help stop tax evasion."

New Zealand’s foreign trust law allows non-residents to set up trusts here in New Zealand holding assets not liable for taxation. There are approximately 8000 foreign trusts registered with the Inland Revenue Department (IRD) holding assets estimated to be worth tens of billions of dollars. Little information is required to register a foreign trust which means ownership is effectively anonymous and assets are invisible.

“New Zealand’s foreign trusts hide billions of dollars of assets and should be broken open to help stop the global tax evasion industry,” said Dr Norman.

“We’ve become a major participant in a global tax avoidance problem due to our lax taxation laws surrounding foreign trusts.

“It’s time to demand some transparency from our foreign trust regime.”

The Law Commission reported in 2010 that our taxation rules have led to a substantial foreign trust industry in New Zealand. Our lax disclosure requirements – uncommon in the OECD – combined with our settled political and legal system ‘make New Zealand an attractive haven for offshore trusts’.

“IRD has few tools, if any, to help foreign governments pursue tax cheats,” said Dr Norman.

“IRD has such lax disclosure and reporting standards, it recently disclosed in a Parliamentary question that it doesn’t even keep records of how many governments approached them requesting information on our foreign trusts.

“We’re not pulling our weight in the global effort to fairly tax the world’s super rich.

“Tax avoidance on this scale, when you boil it down, means middle and lower-income taxpayers are having to pay more tax to cover the shortfall for the health and education services their governments are trying to provide,” Dr Norman said.

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 37 countries New Zealand currently has double tax agreements with.

Parliamentary Question for Written Answer (#07369):
Question: How many times, if any, has the Inland Revenue Department investigated foreign trusts in New Zealand since January 1, 2007?
Minister of Revenue, Hon Peter Dunne: Inland Revenue regularly reviews the operation of foreign trusts as part of its on-going compliance activities. For example, in the course of several investigations since 2007, Inland Revenue came across some foreign trust arrangements that might have had a purpose of avoiding tax. Inland Revenue subsequently exchanged its findings with other jurisdictions under double tax agreements. Inland Revenue keeps records about its investigations in general, but the number of investigations specifically relating to foreign trusts is not recorded.

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Bullish On China Shopping: Trade Minister On Premier's Visit

Q+A: Trade Minister Todd McClay – not ruling out a conversation around Chinese workers coming to New Zealand to work on infrastructure projects as part of trade talks:

‘Yeah, well, that’s not something that’s on the table at the moment, but, look, what we’ve agreed as part of the, you know, when we start the upgrade negotiation, both sides can raise issues that are of importance to them. We’ve got a list of things we want to talk about. China may well have.’ More>>

 

Little Heading For Court: Apology Over Donation/Hotel Contract Claims Not Accepted

Today I want to publicly apologise unreservedly to Mr Hagaman for any hurt, embarrassment or adverse reflection on his reputation which may have resulted from my various media statements. I have offered that apology to the Hagamans. More>>

ALSO:

Biscuit Tin Of Democracy: World Heritage Site Protection, Ombudsman and Equal Pay Bills Drawn

On Thursday, 23 March 2017 three places are available on the Order Paper for the first reading of a Member’s bill. The ballot was held, and resulted in the following bills being drawn... More>>

ALSO:

Emissions Plan: NZ Needs More Science, More Trees, Fewer Beasts

A combination of technology breakthroughs, much more plantation forestry, and a big switch away from pastoral, particularly dairy farming, are identified as the key elements of any approach New Zealand takes to reducing its carbon emissions to a net zero level, according to a new report sponsored by the New Zealand chapter of GLOBE, a multi-party, global parliamentary grouping. More>>

ALSO:

"Backed To Win Seats": Labour Māori Seat MPs Won't Stand On List

The Labour Party is backing a request from its Māori seat MPs to stand as electorate MPs only, says Labour Leader Andrew Little. More>>

OutsKey: John Key's Valedictory Speech

I rise to address this House for the very last time. It has been a huge privilege to have served the people of Helensville as their member of Parliament, and, of course, the people of New Zealand as their Prime Minister. More>>

ALSO:

Productivity Commission: New Models Of Tertiary Education Are Coming

The report is a broad-ranging inquiry into how well New Zealand’s tertiary education system is set up to respond to emerging trends in technology and the internationalisation of education, and changes in the structure of the population, and the skills needed in the economy and society... More>>

ALSO:

PM's Press Conference: Water Everywhere

Monday's Post-Cabinet press conference focused on water, with the Prime Minister fielding questions about the possibility pricing water taken for export. Mr English said the government was directing their water allocation technical advisory group to include export water in considerations. More>>

ALSO:

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news