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Look what the nice man offered me!

25 February 2019 2 comments

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From an email recently received;

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from: Edwin Gichana <edwin@valsenfiduciaries.com>
to: “fmacskasy@gmail.com” <fmacskasy@gmail.com>
cc: David Morema <david@valsenfiduciaries.com>
date: 9 Jan 2019, 06:53
subject: Seychelles International Trust with Bank Account
mailed-by: valsenfiduciaries.com
Signed by: valsenfiduciaries.onmicrosoft.com

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Dear Esteemed professional,

We trust this email finds you well.

We are writing to you to inform you of the availability of a versatile wealth management structure in Seychelles. “The Seychelles International Trust”

We set up and administer Seychelles trusts at very competitive rates while providing you or your clients a highly personalized service.

Below are some of the landmark features of a Seychelles International Trust

a) Zero tax on Trusts

b) Pocket friendly prices – some of the lowest prices across all jurisdictions

c) Speedy formation

d) Light annual compliance

e) Re-domiciliation is permitted

f) No access to public records

g) It comes with a bank account to support operations

Popular Uses of a Seychelles International Trust:

ü Used for asset protection, tax planning and as a family and succession planning vehicle

ü Used for collective investments (Mutual Fund) structures

ü Can be used for the benefit of employees (ESOP)

ü Can do commercial transactions through Seychelles IBC

For more information Seychelles Trusts and other Estate Planning solutions please visit our website or contact us on the details below.

We look forward to hearing from you.

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Firstly, it’s deeply and amusingly ironic that a dodgy outfit sending out random, spam solicitations to unknown people expects confidentiality and “legal privilege”.  It’s a miracle they didn’t email an official at Interpol, FBI, or other law enforcement agency.

Secondly, me being a polite bloke, I emailed back, declining to participate, and offering certain observations;

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Edwin Gichana <edwin@valsenfiduciaries.com>
date: 9 Jan 2019, 14:43
subject: Re: Seychelles International Trust with Bank Account

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Kia ora Edwin,

Thank you very much for taking the time to email me regarding your offer of a tax-dodging Trust in the Seychelles.

No doubt you have many wealthy clients who partake of your services, thereby avoiding/escaping paying taxes in their own country.

You may wish to ponder that the avoidance of paying tax is one of the leading causes of sovereign governments unable to provide basic health, education, housing, and transport services for their people. This creates poverty and a rising sense of hopelessness.

It also provides fuel for extremist right-wing and ultra-religious organisations as the powerless; the poor; the disaffected seek answers and solutions from outside the mainstream.

So the next time there is a riot or civil war or some other social upheaval – just ask yourself what part you and your colleagues played in the struggle between the Haves and the Have Nots. As with drug trafficking, cross-borders sex-slave trade, child-porn websites, and international arms industry, your profession is not one that I would encourage my own children to engage in.

I have dozens of dollars and will be investing them in ethical services and paying my fair share of tax on them.

I sincerely hope you find an honest job soon. (We have vacancies for fruit-picking here in New Zealand.)

Regards,
-Frank Macskasy

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Ok,  taking-the-piss out of tax-dodging companies, touting for business via spam-mail, is one thing.

Foreign companies touting for business that would erode our own country’s tax base by shifting company and personal wealth to secret tax havens – is another. In some ways, it should be considered a hostile economic act.

New Zealand has diplomatic as well as commercial dealings with the Republic of Seychelles since 1992. We also – apparently – have  something called a “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS” (Base Erosion and Profit Shifting) – which supposedly includes Seychelles.

The Multilateral Convention replaced a Tax Information Exchange Agreements (TIEA) that was being negotiated by MFAT (Ministry of Foreign Affairs and Trade) in 2010.

According to MFAT;

Double Tax Agreements (DTAs) reduce tax impediments to cross-border trade and investment and assist in the prevention of tax avoidance and tax evasion. Tax Information Exchange Agreements (TIEAs) are a limited form of DTA that are concerned only with assisting in the prevention of tax avoidance and tax evasion.

Those negotiations were never concluded, and the Multilateral Convention came into effect instead.

Organised through the OECD, the “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS” stated in it’s opening paragraph;

The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Convention) is one of the outcomes of the OECD/G20 Project to tackle Base Erosion and Profit Shifting (the “BEPS Project”) i.e. tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid.

In effect, the OECD Multilateral Convention was designed to close down (or restrict greatly) the activities of tax havens, as revealed in the millions of leaked documents from Panamanian law firm, and corporate tax-dodging service provider, Mossack Fonseca in 2015 (aka, the “Panama Papers“).  Both New Zealand and Seychelles were revealed to be complicit in international tax evasion practices.

Seychelles signed the (OECD) Multilateral Convention on 7 June 2017;

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However, as far as the author can ascertain, Seychelles has opted-out or reduced it’s obligations to the OECD Multilateral Convention through a raft of exclusionary clauses in it’s document, “Status of List of Reservations and Notifications at the Time of Signature“.

For example, amongst the many provisions Seychelles has exempted itself is the salient raison d’être for the very existence of the OECD Multilateral Convention – “Article 10 – Anti-abuse Rule for Permanent Establishments Situated in Third Jurisdictions“. This paragraph refers to income earned in one jurisdiction (Country “A”)  being treated as non-taxable by a second jurisdiction (Country “B”) under a “Covered Tax Agreement” (a previous agreement between countries which allowed profits not to be “second taxed” – or taxed at all).

The OECD Multilateral Convention would have prevented an Income Earner (eg, a corporation) from using Country B, purely for low or nil taxation purposes, and insisted that said Income Earner pay tax in Country A;

“In such a case, any income to which the provisions of this paragraph apply shall remain taxable according to the domestic law of the other Contracting Jurisdiction, notwithstanding any other provisions of the Covered Tax Agreement.”

Seychelles declined to bound by that simple statement.

The language of the Convention and the Seychelles document are framed in legalese, and are difficult for the lay person to interpret.  But the upshot is that Seychelles remains a tax haven – despite being a supposed signatory to the OECD Multilateral Convention.

Indeed, Seychelles’ status as a tax haven is currently touted by several firms specialising in tax dodging activities:-

From Offshore Protection.com;

Seychelles diligently encourages local and foreign investment; thus it offers:

  • Low government fees
  • Tax-resident low-tax and non-resident tax free structures
  • A growing matrix of tax treaties used for investment into other countries
  • An international trade zone

[…]

If you are looking for a tax haven with a solid secrecy policy, attractive offshore business laws, Seychelles may be the perfect choice for your next offshore company formation.

From Taxhavens.biz;

Seychelles as a tax haven is one of the most desired tax havens available to date. The government of Seychelles has invested a lot in the country in order to make it the tax haven that it is today. Seychelles as a tax haven has seen the modification of legislation which led to a modern but very strict offshore sector in the islands. The laws which govern the offshore tax haven of Seychelles provide asset protection, reduction of tax liabilities, privacy and confidentiality for individuals and corporations.

Disturbingly, Taxhavens.biz also promotes our own country on it’s website;

Although New Zealand is said not to be a tax haven there are certain features which make people associate the jurisdiction with tax havens. The fact that the country has offshore services which includes offshore business entities and offshore trust formation tend to qualify New Zealand as a tax haven.

No wonder New Zealand featured in the Panama Papers with links to tax dodging. Economist Shamubeel Eaqub condemned our secrective Trust laws as “firmly in a moral grey zone” and that “we have a moral duty to ensure our rules and regulations do not facilitate dishonest practices by others”.

From Fidelity Corporate Services Ltd;

Seychelles International Business Company (IBC)

Seychelles IBC – an International Business Company – is the most popular and versatile type of offshore corporation available in Seychelles. Similar to other classic offshore companies, Seychelles IBC is designed to engage in international business. Being an IBC, it is subject to minimum red-tape. While being obliged to keep internal records and registries in good order, a Seychelles IBC does not nave to submit any financial reports to public file. There is also no mandatory audit requirement.

[…]

Zero tax

A Seychelles IBC, by the definition of the law, is not subject to any tax or duty on income or profits. Article 361.(1) of the Seychelles International Business Companies Act, 2016, states as follows:

361.(1) A company, including all the income and profits of a company, is exempt from the Business Tax Act.

In a similar fashion, a Seychelles IBC is also also exempt from any stamp duties on all transactions relating to its business, in particular on any transfers of property to or by the company, and on any transactions in respect of the shares, debt obligations or other securities of the IBC.

Essentially, a Seychelles IBC is a completely tax-free offshore corporation, insofar as it complies with a few simple rules of operation. The main requirement is that a Seychelles IBC should not pursue business within the territory of the Seychelles (except, of course, it may enter into business with any other Seychelles IBC`s). The law provides that all exemptions for a Seychelles IBC shall remain in force for a period of twenty years from the date of incorporation of the IBC.

These provisions are enshrined into PART XXI of the Seychelles IBC Act (Articles 361, 362 and 363).

To strengthen secrecy, “virtual offices” are offered to companies utilising Seychelles as a tax haven;

In standard configuration, a Seychelles IBC would only have a Registered Address and Registered Agent in Seychelles, thus meeting the mandatory minimum domestic presence requirements. However, the usage of the Registered Address for routine business purposes is usually very limited. An additional functionality can be provided to an IBC by choosing some of the optional virtual office services.

A virtual office facility may include mail and fax forwarding service, shared or dedicated telephone and fax numbers, telephone call handling service, document preparation and re-mailing service. Using one or more of these optional services will contribute a more substantial “bricks and mortar” appearance for Your Seychelles IBC.

“Virtual offices” are a hallmark of tax-havens, giving the appearance of a company or individual being based in a jurisdiction, but often it is little more than “mail and fax forwarding service, shared or dedicated telephone and fax numbers, telephone call handling service, document preparation and re-mailing service” to create the illusion of a “substantial “bricks and mortar” appearance for Your Seychelles IBC”.

And if the above weren’t enough, Seychelles compounds secrecy using “International Trusts”, which can further obscure companies, individuals, and their income;

Seychelles International Trusts are commonly used in conjunction with the Seychelles International Business Companies. By using a trust to hold shares in the IBC, an additional layer of legal protection is provided for the owner. Moreover, this can enable beneficiaries to defer or avoid any possible tax on the profits of the IBC for an indefinite period.

One promoter of laissez faire tax-free jurisdictions, “Nomad Capitalist” has gone so far as to warn of the extreme nature of Seychelles as a tax haven;

I’m all for the creation of new tax havens. It’s refreshing to see governments coming to the realization that their bread is best buttered by business being conducted in their country…

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…I’ve seen a number of small business owners set up shop in the Seychelles, often with disastrous results. Just recently, I advised an internet marketer get almost $100,000 from a frozen merchant account because the company refused to pay offshore companies in shady places like the Seychelles.

[…]

Any jurisdiction that doesn’t require you to keep books, maintain records, undergo any type of audit, pay any type of tax, or report your activities in any way is either on everyone’s blacklist or about to be on it. Seychelles falls into that category, which is why I get quite a few emails each year from people who have a mess to clean up there.

When even a free-marketeer, low-tax capitalist looks askance at a tax haven like Seychelles, it should ring alarm bells.

Seychelles has not taken it’s obligations seriously under the OECD “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS”.

Seychelles continues to operate internationally as a Privateer-Pirate, seeking to loot other countries of their tax revenue (ie, “Base Erosion and Profit Shifting”).

Seychelles tax-dodging firms are touting for business in countries like ours.

So why do we still maintain diplomatic as well as commercial ties with Seychelles? What possible gain do we get from ties to another country – albeit a fellow Commonwealth member – that is practically waging covert economic war against our our tax base?

I put that question to Finance Minister, Grant Robertson;

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from: Frank Macskasy <fmacskasy@gmail.com>
to: Grant Robertson <g.robertson@ministers.govt.nz>
date: 12 Jan 2019
subject: Tax havens

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Kia ora Mr Robertson,

Would you be able to comment on the following story regarding Seychelles’ ongoing activites as a tax haven (see [above] ).

A recent email to me touted for business, offering to set up a tax-dodging trust in the Seychelles. Naturally, I declined the offer.

However, that raises serious questions why we continue to have links with Seychelles when they remain a tax haven and are not fulfilling international commitments under the OECD’s “Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS”.

Specifically, why do we continue to have diplomatic links with a country that actively undermines our tax base by offering it’s services to New Zealand citizens as a tax haven?

What benefit do we gain by continuing diplomatic and commercial links with Seychelles?

Will your Coalition Government undertake specific measures to combat Seychelles’ ongoing tax haven activities, especially as they relate to our country?

Will your government lodge a protest with the Seychelles’ government for their country’s tax-haven companies approaching New Zealand citizens to engage in tax dodging activities?

I look forward to your response at your earliest convenience.

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Regards,
-Frank Macskasy

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If there is no possible benefit to maintaining contact with Seychelles, and if that nation continues to actively allow it’s citizens to undermine our tax-base, then we should cut ties immediately. A country that threatens our economic activity is not a friend – it is a hostile force.

The letter to Grant Robertson was forwarded to Minister of Revenue, Stuart Nash. Five weeks later, Minister Nash responded.

He began by stating;

The OECD, and its monitoring agency the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum), are working to implement a global standard for transparency and exchange of tax information. I can assure you that New Zealand continues to be a strong voice in what has become a significant international effort to ensure all Global Forum member jurisdictions comply with these standards.

In 2009, the Global Forum was commissioned to undertake comprehensive peer reviews and other monitoring, to assess compliance with the new international standards. The G20 stepped in after the global financial crisis to asist the OECD and establish oversight. The Global Forum now reports directly to the G20, which is positioned to apply sanctions if necessary to ensure compliance. This development has resulted in a significant change in international attitudes, with jurisdictions typically now making stringent efforts to address identified deficiencies to avoid being treated as non-compliant.

Note that Minister Nash claims there has been “a significant change in international attitudes“.

It is unclear how “significant” that “change” has been when – as pointed out above – Seychelles’ law specifically allows for any International Business Company  to “not [be] subject to any tax or duty on income or profits” and furthermore is clear in that IBCs are “a completely tax-free offshore corporation, insofar as it complies with a few simple rules of operation”.

Furthermore, Minister Nash then claimed;

The breakdown of secrecy has marked the end of tax havens, given that the key feature protecting tax havens was secrecy. Schemes will no doubt continue to be developed and promoted with the intention of facilitating tax avoidance and evasion, but in the current international environment these will become more difficult, costly and risky for the taxpayers to use.

Minister Nash’s insistence that there has been a “breakdown of secrecy” which has “marked the end of tax havens” appears to be premature. These are not just random “schemes” being promoted. They are carefully planned business structures supported by Seychelles’ law.  The legal use of “virtual offices” under Seychelles’ law does not “breakdown” secrecy – it facilitates it.

Whatever sanctions might apply from the OECD or G20 has not deterred Seychelles officially promoting itself as a tax haven.

The point I made above remains unanswered: Why do we still maintain diplomatic as well as commercial ties with Seychelles – a country that is practically waging covert economic war against our our tax base?

The government appears pre-occupied with other matters. Like China.

Postscript

Seychelles has a listing on both Wikipedia and Encyclopaedia Britannica. Curiously, neither make any reference to Seychelles’ notorious reputation as a tax haven. If any such references have ever been made on those entries, they have been ‘scrubbed’ clean.

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References

Seychelles News Agency: Blue economy, climate change top the agenda between Seychelles, New Zealand.

IRD: Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (the MLI)

IRD: Tax treaties – recent changes

MFAT: Double Tax Agreements

OECD: Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS

Wikipedia: Panama Papers

Wikipedia: Panama Papers – New Zealand

Wikipedia: Wikipedia: Panama Papers – Seychelles

OECD: Signatories and Parties to the Multilateral Convention to Implement Tax Treaty related measures to prevent Base Erosion and Profit Shifting

OECD: BEPS – MLI Position – Status of List of Reservations and Notifications at the Time of Signature

Offshore-Protection.com: Seychelles Offshore

Tax Havens: Seychelles

Tax Havens: New Zealand

Fairfax media: Panama Papers – More New Zealand links to come

Fairfax media: Shamubeel Eaqub – Panama Papers show NZ is complicit in criminal behaviour

Fidelity Corporate Services: Seychelles International Business Company (IBC)

Fidelity Corporate Services: Virtual Office Facility Service Description And General Conditions

Fidelity Corporate Services: Seychelles International Trusts

Nomad Capitalist: Four offshore company jurisdictions to avoid in 2018

Wikipedia: Seychelles

Encyclopaedia Britannica: Seychelles

Additional

NZ Herald: IRD rubbishes Oxfam claims of tax evasion by big drug companies

Business Insider: How the super-wealthy hide billions using tax havens and shell companies

The Guardian: We’re losing $240bn a year to tax avoidance. Who really ends up paying?

The Guardian: Tax havens shielding companies responsible for deforestation and overfishing

TV1 News: Panama Papers investigation – ‘NZ absolutely, conclusively is a tax haven’

International Consortium of Investigative Journalists: The Revolution Will Be Digitized

Other blogs

The Standard: Why was John Key singled out by Panama Papers hacker?

Previous related blogposts

Panama Papers: Matthew Hooton’s Alternate Universes on Twitter and Radio NZ

Dodgy tax havens and even dodgier Peter Dunne’s memory

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This blogpost was first published on The Daily Blog on 20 February 2019.

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Dodgy tax havens and even dodgier Peter Dunne’s memory

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ft-paraisos-fiscales

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“To put it bluntly, if the label ‘tax haven’ is being bandied about now as it is, sticks, then that’s extremely damaging. You think of the way we perceive other countries that we’ve historically labelled as tax havens. We don’t view them credibly, and I think that’s the big risk to New Zealand.” – Peter Dunne, TVNZ’s Q+A, 2 May 2016

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Against a swirling back-drop of revelations surrounding the Panama Papers, Mossack Fonseca, John Key’s lawyer, Ken Whitney, then-Revenue Minister Todd McLay,  the IRD dumping a review into foreign trusts, and New Zealand’s reputation for offering secret trusts as part of the tax-haven industry,  TVNZ’s Greg Boyd interviewed former Revenue Minister, Peter Dunne for Q+A on 2 May;

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peter dunne interviewed on Q+A by Greg Boyd

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Boyd’s first question to Dunne seemed innocuous enough, setting the basis of the interview. Dunne’s response appeared unremarkable;

Greg Boyd: “When you were in the job, if the IRD had concerns about this country’s international reputation, how seriously would you have taken that?”

Peter Dunne: “Very seriously. And the way it works is that they report on a series of issues that are both current in the New Zealand tax environment or the international tax environment, and clearly the Government would be foolish not to take heed of that advice. I have to say that at the time I was minister, the big issue of concern that was just beginning to bubble related to the Googles and the big multinationals and the share of tax they were paying. The issue of foreign trusts was on the edges of that, but I didn’t receive any specific advice from the IRD at that time that they were a problem.”

To put some context to Dunne’s response above, first bear in mind that Dunne was Revenue Minister across two governments, Labour and National, from October 2005 to  June 2013, when he abruptly resigned

…after an investigation into how a top-secret report on the GCSB was leaked to media pointed to him.

Eighty-six emails were sent between Mr Dunne and Dominion Post reporter Andrea Vance in the lead up to the leak but Mr Dunne turned down requests to make them public.

Edited copies of the emails from Mr Dunne show 44 of them discussed the GCSB report, and he planned to meet with Ms Vance the day before she went public…

But how credible was Dunne’s assertion on last week’s Q+A that;

“…The issue of foreign trusts was on the edges of that, but I didn’t receive any specific advice from the IRD at that time that they were a problem.”

– when in May 2012, New Zealand and Russia had been removed from the  European Union banking and corporate “white list” over this country’s frighteningly inadequate  money-laundering controls?

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New Zealand removed from EU 'white list' - money laundering - tax havens

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As reported by Fairfax’s Michael Field, Latvia’s Deputy State Secretary on financial policy issues in the Ministry of Finance, Arina Andreicika, stated;

“I would like to inform you that Latvia has intended to exclude New Zealand and Russian Federation from the list of countries whose legal requirements of money laundering and terrorist financing prevention are equivalent to legislation of the European Union.”

Our removal from the EU “white list” had put New Zealand in the same league as the corruption-ridden Russian Federation.

Gareth Vaughan, from Interest.co.nz, reported;

New Zealand’s dumping from the list also comes amid growing publicity around New Zealand registered companies being linked to crime overseas. This includes a report by the Organized Crime and Corruption Reporting Project on how Tormex Ltd, a New Zealand registered company, allegedly laundered US$680 million through a Latvian bank account. It’s just one of many examples of entities exploiting New Zealand’s simple company registration regime. Another is the General Equity Building Society, which claims to hold about US$5.5 billion of equity through unnamed mines, gold, silver and granite ore.

In the same story, Vaughan added,

The World Bank and International Finance Corporation rank New Zealand the easiest of 183 countries surveyed in which  to start a business. Commerce Minister Craig Foss told interest.co.nz in April the Government had no plans to tighten company registration rules.

In the previously mentioned Fairfax story, Michael Field reported;

On the Auckland shell company accused of laundering $680m at a Riga bank, Foss said it was removed from the register in 2010 because it failed to file an annual return.

Too late. The damage to our reputation had been done.

In May 2012, when the European Union’s announcement became public, Peter Dunne was still Minister for Revenue. (His resignation after his alleged involvement in the leaking of the GCSB report was still thirteen months in the future.)

In November 2013, then co-leader of the Green Party, Dr Russel Norman, warned;

“Our secretive foreign trust regime and lax company registration requirements are damaging our international reputation.  Anonymous shell companies and secret trusts are one of the most common ways of moving tainted money into the banking system.”

Yet, only months earlier, as the full implications of the EU’s moves were becoming clear, evidently then-Revenue Minister Peter Dunne “didn’t receive any specific advice from the IRD at that time that they [foreign trusts] were a problem“.

However, whilst  then-Revenue Minister Peter Dunne had not received “any specific advice from the IRD at that time that they [foreign trusts] were a problem“, the Tax Justice Network had, by November 2013, “ranked New Zealand for the first time on its Financial Secrecy Index [at number 48 – see page 17 here]. New Zealand features on the Index due to our lack of transparency around foreign trusts and registered companies, and our below-average levels of co-operation with other countries when it comes to fighting international tax evasion”.

Is it Dunne’s  assertion on Q+A, really credible;

“…The issue of foreign trusts was on the edges of that, but I didn’t receive any specific advice from the IRD at that time that they were a problem.”

No, it is not credible.

As far back as October 2012, Dunne was certainly aware of the problem of secret trusts in New Zealand;

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Dunne dismisses tax haven suggestions

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The Herald report goes on to state;

Mr Dunne today dismissed the idea that New Zealand was a tax haven for foreign trusts.

“The key identifying characteristics of tax havens are secrecy and lack of transparency. Those are simply not factors here in New Zealand. Our legislation for taxing trusts is fully transparent.”

Dunne’s dismissive attitude toward tax havens and foreign trusts is starkly summed up in this excerpt from 60 Minutes on TV3’s website;

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Govt rejects tax haven claim - peter dunne - revenue minister - 60 minutes

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However, Dunne’s defensive assertions were made to look foolish and mendacious when Herald reporter, Matthew Backhouse , added;

The trusts must be registered with Inland Revenue, but are not required to pay tax and their ownership is effectively anonymous.

At the time, our esteemed Dear Leader also supported New Zealand’s involvement in secret foreign tax trusts;

Prime Minister John Key was today unconcerned by Mr Dunne’s comments.

He had not seen the 60 Minutes interview but Mr Dunne would have been using “the absolutely correct technical terms”, he said.

Mr Key said servicing foreign trusts in New Zealand was a strong and legitimate business that employed a lot of professionals and added to the New Zealand economy.

“It’s a very sensible place to house a trust.”

It is difficult to believe Dunne’s assertion that he “didn’t receive any specific advice from the IRD at that time that they [foreign trusts] were a problem“.

Especially as revelations on 60 Minutes clearly revealed that a problem with tax evasion existed; trusts were central to the rorts; and Dunne was responding to it.

Even Key referenced foreign tax trusts as he rushed to defend his then-Revenue Minister;

Key who said Dunne was right. “He’ll be using the absolutely correct technical term. There are two things, going back to my days at university – tax evasion and tax avoidance. There is actually quite legitimate business in New Zealand for servicing foreign trusts”.

In response to Dunne’s denials, Labour’s then-Revenue spokesperson, David Clark, showed amazing prescience when he warned;

“We are in danger of losing our hard-one reputation as an ethical and respectable country. Peter Dunne’s relaxed attitude to overseas tax avoidance and National’s failed attempts to create a foreign funds hub shows the Government has no concerns about us becoming the Cayman Islands of the South Pacific.”

And Dunne is now telling us that he did not know that foreign trusts were a problem?

In 2012, Dunne stated;

“The key identifying characteristics of tax havens are secrecy and lack of transparency. Those are simply not factors here in New Zealand. Our legislation for taxing trusts is fully transparent.”

The legislation may be “transparent”.

John Key, Todd McLay, and Peter Dunne are not.

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References

TVNZ: Q+A – Peter Dunne Interviewed by Greg Boyed (video)

Radio NZ: Further revelations don’t blunt PMs faith in lawyer

TVNZ: Q+A – Peter Dunne Interviewed by Greg Boyed (transcript)

Wikipedia: Peter Dunne

Southland Times: Taxing Times – New Minister of Revenue still has work to do

NZ Herald: Key’s Government

TV3 News: Peter Dunne resigns as minister

Fairfax Media: New Zealand removed from EU ‘white list’

Interest.co.nz: How NZ needs to overcome ‘deficiencies” in bank and financial institution regulation to get back on EU anti money laundering and counter terrorist financing ‘White List’

Radio NZ: NZ struck from EU list over money-laundering controls

Scoop media: Foreign trusts earn New Zealand tax haven status

Tax Justice: Financial Secrecy Index 2013

NZ Herald: Dunne dismisses tax haven suggestions

TV3 News: Govt rejects tax haven claim

Scoop media: Dunne evades tax haven questions

Additional

Liberation: New Zealand cartoons about tax, transparency and the Panama papers

Parliament: The Anti-Money Laundering and Countering Financing of Terrorism (Requirements and Compliance) Regulations 2011

Dept of Internal Affairs:  AML/CFT Act and Regulations

NZ Herald: Fran O’Sullivan – Key chases luck o’ the Irish

Converge: New Zealand – A Tax Haven For Super-Rich Foreigners

Previous related blogposts

When National is under attack – Deflect, deflect, deflect!

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scott cartoon - panama papers - tax havens

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This blogpost was first published on The Daily Blog on 6 May 2016.

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