Wednesday, April 6, 2016
New Zealand's Revenue Minister, Michael Woodhouse, has defended the country's tax system in response to calls from opposition parties to tighten the tax rules following the so-called "Panama Papers" leak.
Woodhouse said in a statement that New Zealand has a very sound tax system with world-class tax rules. "We tax people who live, work, and do business here. We don't tax foreign income earned by foreigners," he said. "The same principles apply to trusts, and have done since 1988."
"It is ridiculous to suggest that New Zealand is a tax haven, as tax havens thrive on secrecy," the Minister said. "Our tax rules require foreign trusts to be registered. We also have a strong tax treaty network with the express purpose of discovering and preventing tax avoidance by exchanging information between tax jurisdictions."
"We have an ongoing responsibility to ensure these rules are robust so we can comply with our international obligations. The OECD has looked at our foreign trust rules in the past and had no concerns with them. The tax treatment of foreign trusts may come up in the OECD's Base Erosion and Profit Shifting work program in which case we would look at our own rules in the context of everyone else's," he added.
"New Zealand has also been a very active participant in the OECD and G20 work to combat tax avoidance. We continue to be a strong voice in this area," Woodhouse concluded.
The "Panama Papers" leak concerns more than 11.5 million internal documents belonging to Panamanian law firm Mossack Fonseca. The data includes emails, financial spreadsheets, passports, and corporate records relating to the ownership of bank accounts and companies in 21 offshore jurisdictions. It covers a nearly 40-year period, through to the end of 2015.