New Zealand Tax Man Targeting Overseas Accounts
Wednesday, October 19, 2011
The New Zealand Inland Revenue has issued a revenue alert advising people that
they are required to declare all income from foreign sources.
It is concerned that some people are structuring their affairs by using entities such as offshore trusts, foundations and companies to make their income appear to be outside the New Zealand tax system.
Revenue alerts are
issued by the Commissioner of Inland Revenue to provide information about significant
or emerging tax planning issues.
Group Tax Counsel, Assurance, Graham Tubb said that Inland Revenue was aware
of New Zealand tax residents who may have taxable offshore income held in an
offshore bank account, which is accessible in New Zealand, and that this income
may not be returned in New Zealand for income tax purposes.
The Inland Revenue says that it is carrying out audits on a number of New Zealand
tax residents who have offshore credit or debit cards and who have been found
to hold offshore bank accounts or receive offshore income.
Mr Tubb warned that if people deliberately divert income into an offshore bank
account to evade or avoid the payment of tax, or to claim a greater amount of
Working for Families Tax Credits, they may be committing criminal offences under
the Tax Administration Act 1994.
"Inland Revenue is working in close collaboration with the revenue authorities
of other countries to reduce the use of offshore bank accounts and offshore
schemes to misrepresent income or assets and evade tax in this country. We have
signed 18 tax information exchange agreements, with more under negotiation.
These agreements give us access to key ownership and banking information,"
"Failure to declare offshore income or to make appropriate disclosures
to Inland Revenue can attract serious penalties. Penalties may be reduced by
making a voluntary disclosure," said Mr Tubb.