As a part of a massive leak of data from Mossack Fonseca, a Panama-based law firm, New Zealand joins the list of tax-free status, confidential and legal secure countries for off-shore accounts.
Along with Panama and Cayman Islands, it joins the list after 9 May report of the recent expose of reports of 2.1 lakh companies set up overseas, with both legal and illegal status. According to a joint report by Radio New Zealand, TVNZ and investigative journalist Nicky Hager, Mossack Fonseca actively promoted New Zealand as a good place to do business due to its heavy advantages as a tax haven.
The report has analyzed 61,000 documents relating to New Zealand, providing spotlight on how the world’s rich take advantage of offshore tax regulations. PM John Key has shown interest in changing rules around foreign trusts, if advised so.
In a press conference, he told reporters, “If there’s any need for change in this area, the government will consider it and take necessary action.” The NZ Government, only last month, claimed it would begin a review of its foreign trust laws after the leaks highlighted vulnerabilities in its legal framework that made it a possible link in international tax avoidance structures because its foreign trusts are not subject to tax.
Meanwhile, Mossack Fonseca’s main contact in New Zealand was suspected to be Robert Thompson, co-founder and director of accountant firm Bentleys, the registered office of Mossack Fonseca, New Zealand. He, himself, was listed in over 4,500 Panama paper documents.
In defense, Thompson mentioned in an interview with Radio New Zealand, “I think the assumption that all New Zealand foreign trusts are being used for illegitimate purposes is unfounded and based largely on ignorance.”
According to new reports stating Inland Revenue figures, the number of foreign trusts in New Zealand has surged to 10,700 this year from less than 2,000 10 years ago, highlighting the growth of the issue of illegal offshore investment in the world.