April 11, 2016
New Zealand’s government on Monday said it would begin a review of its foreign trust laws after leaked documents from a Panamanian law firm highlighted vulnerabilities in its legal framework that made it a possible link in international tax avoidance structures.
“Ministers decided that in light of the ‘Panama Papers’ being released last week, it’s worth looking at whether the disclosure rules are fit for purpose and whether there are practical improvements we can make,” said Finance Minister Bill English in a statement.
The Panama Papers showed how offshore companies often tout New Zealand trusts as a secretive way to create a non-taxed vehicle in the South Pacific nation.
New Zealand has long been identified by lawyers and legal experts as offering a trust regime popular with the offshore trust business because its foreign trusts are not subject to tax. The country’s tax department recommended in 2014 that there be a review of taxation of foreign trusts.