Signing of Tax Information Exchange with Australia

27th October 2009

Today a Tax Information Exchange Agreement (TIEA) and a Supplementary Agreement on the allocation of taxing rights was signed between the governments of the Cook Islands and Australia.

The TIEA demonstrates the Cook Islands government’s ongoing commitment to the internationally agreed tax standard. This is the third TIEA entered into by the Cook Islands, the other two being with New Zealand and the Netherlands. The Cook Islands has also been active in approaching other countries and has made substantial progress on agreements with Mexico, Ireland, Sweden, Denmark, Norway, Italy, and Korea, amongst others.

MFEM treasurer Andrew Haigh said it’s particularly pleasing to conclude the agreements with Australia given the close relationship between the Pacific countries. It is estimated that more than 50,000 Cook Islanders live in Australia and New Zealand. The Cook Islands sees the TIEA as a positive step for both countries, and in particular it will allow continued legitimate and responsible business relations between the countries.

Minister of Finance Sir Terepai Maoate said the Cook Islands offshore centre has matured over the last two decades, and “is recognized internationally as specialising in family trusts and structures promoting the long term protection of wealth.”

“These trusts are established in the Cook Islands because of the attractiveness of Cook Islands trust law, not because of any tax advantage.”

He explained that the Cook Islands has become a leading jurisdiction in the fight against money laundering with comprehensive laws and infrastructure in place. According to the recently completed review by the Asia Pacific Group on Money Laundering the Cook Islands now ranks ahead of all other pacific countries, including both Australia and New Zealand, in compliance with international standards.

The TIEA allows for Australia or the Cook Islands to request information from the other country where a specific taxpayer is under investigation, and where there is reason to believe that relevant information is held in the other country.

Sir Terepai added that the agreements are further evidence of the Cook Islands positive approach in the international arena and draw us closer again in our relations with Australia.

ENDS