15/02/17

New Zealand: Money laundering gets harder as foreign trust rule changes passed

The changes were recommended by tax expert John Shewan, appointed by the government to review existing legislation following the release of the Panama Papers, reports TVNZ.

The papers revealed details of hundreds of thousands of foreign trusts around the world, and New Zealand was mentioned numerous times.

More than 11,000 have been set up in New Zealand.

Foreign trusts are legal but they can be used to hide wealth from tax authorities and to launder money.

Mr Shewan concluded New Zealand wasn't a tax haven but its rules were light-handed and needed strengthening.

The government accepted all of Mr Shewan's recommendations, and put them into a tax bill that was already in the pipeline.

In future, foreign trusts will be more transparent.

Those who set them up will have to provide significantly more information, and identify beneficiaries.

The bill unanimously passed its third reading, its final stage, last night.

Labour and the Greens supported it but again accused the government of initially failing to acknowledge that any changes were needed, and then taking too long to respond to Mr Shewan's report.

Other changes in the bill make GST returns more business-friendly and reduce compliance costs.