In New Zealand a multilateral convention comes into force

On March 1, 2014 a multilateral convention on mutual administrative assistance in tax matters will come into force. The Convention, which was ratified in New Zealand in November, allows fighting against tax evasion. As it was mentioned by Todd McClay, the Minister of Taxes and Duties of New Zealand, tax evasion is one of the major threats to the tax system of any state. That is why countries should work together rather than separately. The multilateral Convention guarantees a right of tax authorities to request information from the tax services of other countries.

International cooperation in the field of taxation is gaining momentum with the help of G20, which has the automatic exchange of tax information as an aim for 2014.

According to Todd McClay and OECD G20 actively cooperates in the development of common international standards in the field of automatic exchange of data contained in the financial statements. In this regard, New Zealand law may change.

Based on: http://taxpolicy.ird.govt.nz/news/2014-02-28-convention-tax-assistance-enter-force

New Zealand does not lag behind other jurisdictions and also takes measures to fight tax evasion. To my mind, it is connected with the sensational story of the alleged "offshore" in New Zealand. Several years ago there was a rumor that companies, registered in New Zeeland, are fully exempt from taxation and do not have an obligation to submit financial statements. However, this is not true. It should be obvious that New Zeeland has never been an offshore and, probably, will never be. Moreover, a company registered in that jurisdiction is taxable at the rate of 28% (which is not a low rate in comparison with Cyprus). That’s why all companies, which were registered and did not pay taxes, were struck off the Registry and registrars were prosecuted and punished.

But it should be noted that another interesting form of conducting business exists in New Zealand. It is New Zealand Trust. This structure is exempt from taxes if the director is not a resident of New Zealand. One more advantage of this form is that trust is called “trust” but it works as a company.