Geoffrey Cone: Tax Transparency

In a recent blog, attorney Geoffrey Cone reported that despite what some may think, New Zealand is not really “a tax haven.” Cone, of course, is presently a partner at the law firm of Cone Marshall. They have an international clientele of families and their advisers.

Cone works as an international tax and trust attorney and adviser. He has been with the firm since January 1998. He has almost two decades of experience. He specializes in wealth planning–mainly in Italy, Spain and Latin America.

He reports that the OECD maintains a list of tax havens and New Zealand is not on it. He notes that tax havens do impose taxes, have no transparency and legislation inhibits governments exchanging the relevant information.

For those not in the know, the “OECD Model Agreement on Exchange of Information on Tax Matters” is said by experts to be the “gold standard” when it comes to financial transparency. It supports the exchange of data between countries in order to enforce tax laws. New Zealand was actually one of the first locations to be white listed by the OECD for significantly putting the internationally-supported tax standard into use.

Over 10 years ago Michael Cullen introduced news rules following a period of extensive consultation. In New Zealand resident trustees of foreign trusts are required by the IRD to turn in a specific disclosure form (IR607). They must keep financial records or face multiple penalties.

In 2011 new international money laundering legislation was introduced. In most countries today ny settlement of funds must also be reported to the related authorities. NZ now has 39 double tax agreements and more than 20 tax information agreements with other countries. These agreements were made in order to more easily implement cross-border investments and aid in the reduction of tax evasion.

Cone writes that New Zealand does have a reputation as a good location to base one’s assets. He adds that most foreign trusts are for succession planning and asset protection. They are not for tax planning.

According to his blog, most financial service providers are accountants and lawyers. A lot of them also belong to the global group STEP (Society of Trust and Estate Practitioners). These people generally work in collaboration with their counterparts in the countries in which their customers live. They do not compete with tax havens. He concludes that they only compete with countries that similar principles and transparent tax systems such as the U.S., the U.K. and Singapore.

Learn more about Cone:

Comments are closed, but trackbacks and pingbacks are open.