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NZ Publishes Findings On Foreign Trusts

Tuesday, June 28, 2016

The New Zealand Government on June 27, 2016, released tax expert John Shewan's independent Inquiry into Foreign Trust Disclosure Rules, and the steps it is taking to strengthen tax rules as part of its work with the OECD to clamp down on base erosion and profit shifting (BEPS).

Shewan's inquiry noted that foreign trusts are legitimate vehicles and that New Zealand's tax treatment of foreign trusts is appropriate. However, it also recommended that disclosure arrangements should be strengthened, including by:

  • Strengthening the initial registration requirements for foreign trusts, and allowing regulatory agencies to search the register; and
  • Requiring foreign trusts to file an annual return, including their financial statements and details of distributions.

Finance Minister Bill English said: "The Government will look to implement the recommendations after officials have examined the Inquiry in detail and reported back to Ministers. A formal response to the Inquiry will therefore be issued in the coming weeks."

Revenue Minister Michael Woodhouse said that improvements to foreign trust disclosure rules are part of a significant work program to strengthen New Zealand's tax laws and keep them in line with international best practice.

"New Zealand has been working intensively with the OECD to develop a global response to BEPS tax strategies, which allow multinationals to pay little or no tax by exploiting discrepancies in different countries' tax rules and shift profits to places where tax rates are lower," he said.

In October the OECD set out an international action plan to help address this.

"The Government is today releasing the changes New Zealand will make to address profit shifting, based on the OECD action plan, as well as the significant steps we have already taken as part of this global effort," English said.

Woodhouse said a lot of work has already gone into strengthening New Zealand's tax rules, meaning that many of the OECD's recommendations are already implemented. "Our tax settings are already sound, but there is always room to improve," he said.

"We have already strengthened our controlled foreign company rules, thin capitalization rules, bank minimum equity rules, and, more recently, I introduced legislation to improve our non-resident withholding tax rules," the Revenue Minister said. "The next steps include stronger rules preventing excessive payments from a New Zealand company to its foreign parent, greater disclosure requirements for multinationals, and further sharing of tax data with foreign authorities."

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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