Geoffrey Cone’s Response to Last Week’s Feature on Foreign Trusts

 

Geoffrey Cone is a New Zealand-based lawyer. He holds a bachelor’s degree in law from the University of Otago. He also holds a postgraduate diploma in trust and tax law. In 1980, his practice commenced in Auckland, New Zealand. He, later on, moved to Christchurch where he became a partner and the Chairman of Partners at the law company. While he served as chairman of the law firm, he worked as a trust and tax advisor majoring in commercial litigation. He appeared in numerous court proceedings as a chief counsel after working as a litigator in the British West Indies, he returned to Auckland and practiced from 19797. For two years, he worked towards establishing his law firm in 1999. Cone Marshal Limited, his form, is the only law company in the country that specializes in international tax and trust planning. The law firm, under his management, provides trust and trustee management services through its companies.

 

One of the media coverage in a leading media company stated New Zealand as one of the tax havens. For most, this sounds like an attractive ordeal. However, New Zealand is nowhere close to becoming a tax haven. For the wealthy people, finding a tax haven with a favorable environment for business is one awesome. The truth, like other things related to taxes, is mundane.

 

As a matter of fact, we need to consider this issue unresolved. New Zealand, unlike other many countries in its caliber, is not a tax haven. OECD has a list of countries that fall under tax havens. When you carefully look at the list, you will not find New Zealand. For the most of this century, you will never find it there. The main characteristic that points out tax havens is that they have minimal taxes. There is always lack of transparency among the tax havens. Moreover, their procedures and laws inhibit information exchange with governments. New Zealand does not qualify as one of the tax havens.

 

The ultimate transparency standard set by OECD in 2002 covers Tax Matters, Model Agreement, and Information Exchange. One of the first countries to be placed on OECD’s white list is New Zealand. For having implemented the international standard taxation, the state secured its top position.

 

While the country continues to foreign trusts and their imposed requirements, the country has become a leader in transparency. Michael Cullen, in 2006, introduced the tax rules in the area. New Zealand, under his harsh regime, made foreign trusts present duly-filled IRD forms.