The Australasian Chapter ran a very successful event in Auckland at the end of November, with around 65 people in attendance. The event addressed the following controversial topics:
- Is New Zealand a tax haven?
- Could it be stopped and should it be stopped?
- What are the ramifications for anti-money laundering/counter-terrorist financing systems and international perceptions?
Michael Littlewood, professor of tax law at the University of Auckland, presented his research on the history of the New Zealand tax system and how it came to be structured so as to allow the country to be used as a tax haven. In particular, it allows nonresidents to use trusts established in New Zealand to avoid the tax they would otherwise have to pay in their home country. In addition, our keynote speaker posed the following question: "Should New Zealand law be changed so as to prevent tax avoidance of this kind or, at least, to make it easier for other governments to prevent it?"
Examples have surfaced of abuse of New Zealand's offshore trust regime (alongside shell company registration issues), and so further commentary from Tim Goodrick, senior manager at KPMG (and member of the chapter's local New Zealand Working Group) considered how this sits with the Financial Action Task Force, the Asia Pacific Group and other enforcement efforts that are directed toward identifying ultimate beneficial owners.
There was plenty of debate afterwards, both from lawyers and trust/asset planning service providers in defense of legitimate reasons for the existence of these foreign tax trusts, and from anti-money laundering professionals highlighting what a risk area their opaque and confidential nature can represent, in the lack of any kind of public register of trusts.
Thanks are due to KPMG Auckland for kindly hosting this chapter event.