Because of the latest media coverage, you might think that New Zealand Foreign Trusts is a sexy airfield adventure movie that involves exotic lands, wealthy people, and complex financial deals. The truth about the whole issue is somehow ordinary just like many things that are associated with the tax. It is evident that New Zealand is no longer a tax haven. The OECD has a list of tax haven states, and New Zealand is not among them. The main features of tax havens include:
• They enforce nominal tax only
• Lack of transparency
• No exchange of information with other governments
2002 OECD Model Agreement was made a gold standard for transparency, and this agreement governed the exchange of information on Tax issues. It also supports the international exchange of information in admitting and enforcing domestic law tax. New Zealand was among the first nations to be listed on the white list of OECD because it had managed to implement the internationally approved tax standard. Since the country can handle foreign trusts and the needs placed on trustees in a perfect way, New Zealand has managed to demonstrate leadership in tax transparency. It also helps other nations that need relevant information about tax matters.
In many countries, an individual who wants to settle a trust is required to report the reimbursement of funds to their revenue authorities, central banks, and other authorities. It will as well offer tax authorities necessary information to ask for details concerning a particular trust or transaction. The country has 39 double tax agreements that are modified to lessen tax impairments so that they can cross-border investment and trade. It will, in turn, prevent tax avoidance and tax evasion. On top of that, New Zealand has implemented more than 20 tax info exchange contracts with other nations. The agreements are just like double tax agreements, and their work is to prevent tax evasion and tax avoidance. All these actions prove that New Zealand is not a tax haven.
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