In a response to an assumption that New Zealand is a “tax haven” for foreign companies to store funds there, a lawyer named Geoffrey Cone goes through various laws that have been put in place to ensure that New Zealand is not a tax haven, and it does not deserve that title. Geoffrey Cone is a partner at Cone Marshall in Auckland, New Zealand.
First, he writes about OECD (Organization for Economic Co-operation and Development) not having New Zealand on a list of countries that are a tax havens. Tax havens are countries that have little transparency that goes into foreign countries being able to invest there. As the name implies, the lack of transparency in the local laws allows for foreign investors to escape the tax laws of the country in which they are from.
This transparency of laws had a universal standard that was set back in 2002 by the OECD Model Agreement on Exchange on Information on Tax Matters, and New Zealand was an early country that was put on a good list of countries that implemented a tax arrangement that was similar to countries around the world.
Cone goes on to state that New Zealand has 39 double tax arrangements with other countries, and it also has 20 tax information exchanges with other countries as well. The tax arrangements are designed to have fluid cross-border trade that prevents tax evasion, and the 20 tax information exchanges are also designed to prevent tax avoidance.
He notes that he can see why the country would seem like a tax haven country, because it has recently been a place where foreign investors have come to conduct business, but Cone does not see it as a tax haven country. Cone states that the reason why New Zealand has such high foreign investment in its country, is due to its safe, stable nature. He feels that since New Zealand is regarded around the world for being economically sound, it just makes good business sense to conduct business there. In an uncertain economic climate that the world is in, a country like New Zealand is seen as a modern nation, that does not have the same political turmoil that aggravates the economies of foreign nations.