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New Zealand’s secretive global trusts have no reason for remaining as secretive as they do, and global momentum will force New Zealand to open them up and run them more transparently, according to a UK-based Tax Justice Network spokesperson.
John Christensen told Corin Dann on Q+A this morning that our Government’s argument – that New Zealand’s not a tax haven, and does co-operate with other tax regimes through a network of agreements with other countries - is not valid.
“In my opinion, these tax-information-exchange agreements and double-tax agreements are pretty useless,” he said.
“And we've seen that across the world. They're useless because they only work on the on-request model. That is if a tax authority elsewhere gets wind of the fact that someone might have a trust in New Zealand, then the courts might permit information exchange. That simply isn't good enough.
“We now need to move to a new era of automatic information exchange where the trustees of a trust based in New Zealand will automatically inform the tax authorities, who will pass that information on to the tax authorities in the third-party country.
“I'm afraid the existing tax information exchange agreements are worthless,” he said.
On the same programme, Winston Peters echoed the opinion of Peter Bale — the Kiwi who heads the organisation responsible for the Panama Papers leak — that embarrassing revelations are on the way for New Zealand users of secret trusts. The NZ First leader also called for an inquiry.
“Only a fool” wouldn’t think the reputational damage from this week’s document dump isn’t very serious for New Zealand, Mr Peters said.
“It’s got to start with the prime minister, because he has been in flat denial,” Mr Peters told Q+A’s Corin Dann.
“You are going to see enormous fallout in the next few weeks as, when the disclosure happens, with that number of references to New Zealand, we know that this country has been used as a tax haven. Now, that is an enormous reputational risk for a country like ours. Remember, the Cook Islands, we know what the Cayman Islands do, the Jersey Islands and all round the world. But we are not a country with that reputation, and that is why there is going to have to be a serious commission of inquiry," he said.
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No legitimate reason for secretive New Zealand trusts: Tax Justice Network
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