why new zealand is not a tax haven
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TAX AND CORPORATE NEWS Latest news and information about tax and corporate legislations in New Zealand
Why New Zealand is Not a Tax Haven
The international business environment is undergoing a fundamental change, as
multinational corporations and entrepreneurs abandon traditional tax haven jurisdictions
and move their business to stable onshore countries. The shift in attitudes coincides with
a greater push by governments, tax authorities, and international organizations to
enforce stricter transparency rules and stringent reporting laws.
New Zealand is situated in an attractive niche in the international business market,
attracting investments through a wide set beneficial regulations for multinational
entrepreneurs and businesses, while being a stable developed country with a strict
adherence to international standards of transparency and filing requirements, and world
leading infrastructures for doing business.
The Organization of Economic Cooperation and Development has set out conditions which
will help determine whether a jurisdiction could be considered a tax haven, which currently
consist of these four main points:
Whether the jurisdiction imposes no taxes or only nominal rates of taxes. Whether there is a lack of transparency. Whether there are laws or administrative practices that prevent the effective
exchange of information for tax purposes with other governments on taxpayers benefiting from the no or nominal taxation.
Whether there is an absence of a requirement that the activity be substantial.
Applying these factors to New Zealand clearly shows why New Zealand has never been
considered by the international business society as a tax haven, and why New Zealand will
never be considered a tax haven. Under certain circumstances New Zealand can offer
favourable tax regulations for international investors, but these rules are fully transparent
and applied under strict adherence to international regulations. This obvious conclusion is
underlined by the fact that New Zealand has never been regarded as "unfriendly
jurisdiction", "uncooperative jurisdiction", "offshore jurisdiction", "tax haven" or been listed
on any "black list" or "grey list" by international organizations such as the OECD or FATF,
and is still not greylisted or blacklisted by any governments or tax organizations around the
world.
There are certain economic, political, and social methods which help tax professionals to
determine the "unfriendliness" of a jurisdiction and classify them as a tax haven. Applying
these factors to New Zealand will help illustrate New Zealand’s position as a premier
destination for international business.
KIRILL KRUGER
Development Manager at
Abaconda Management
Group , Director of AMG
Business Development.
Kirill Kruger is a young but
experienced financial
consultant, with a
specialization in
international and New
Zealand taxation research,
management and planning.
Being a successful
entrepreneur he has also
authored advanced studies
in the field of financial
academics, and regularly
writes reports on current
affairs and developments in
international and New
Zealand finance, taxation
and management.
www.abaconda.info
+64 7 8080 444
© Abaconda Management Group
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The government of New Zealand has proactively taken steps to ensure that New
Zealand has an effective and transparent tax system, and the New Zealand tax
authorities are consistent in their application of the country's tax legislations when
assessing tax liabilities and enforcing document filing requirements.
The New Zealand government and the New Zealand tax authorities are ready to participate in the exchange of tax information at the request of foreign competent authorities. As at the beginning of 2012, New Zealand was participant in 37 bilateral Double Taxation Agreements, 20 Tax Information Exchange Agreements, and was involved in negotiations and talks for 35 more international tax treaties.
New Zealand actively enforces regulations where lowering tax obligations cannot be the sole purpose of establishing a New Zealand business entity.
New Zealand applies equal tax rates and equal tax rules to all national taxpayers. Whether the jurisdiction imposes no taxes or only nominal rates of taxes.
New Zealand corporate and tax regulations oblige all business to maintain full and readily available accounting, taxation and corporate records.
The fact that New Zealand is clearly not a tax haven, but is a developed nation which is a member of the OECD and one of the most stable economies in the world, has provided the right conditions to draw international investors and entrepreneurs into New Zealand. New Zealand sought to ease the conditions for international corporations moving their headquarters into New Zealand or establishing branches or offices in New Zealand by providing, in some cases, rules where New Zealand entities owned by international investors may not have New Zealand tax obligations on profits incurred outside of New Zealand. Such rules can be utilized by international entrepreneurs by using New Zealand Foreign Trusts, New Zealand Look Through Companies and New Zealand Limited Partnerships, but they still need to comply with their own national tax obligations.