The Panama Papers

The leak of the Panama Papers (“the secrets of dirty money”)  looks massive. It will presumably take some time for all this to be sifted and the key information clarified.

This Is the Leak

2.6 terabytes, 11.5 million documents, and 214,000 shell companies: The Panama Papers are the largest data leak journalists have ever worked with.

Claims of New Zealand complicity: Panama Papers: New Zealand is ‘complicit’ in tax avoidance schemes – expert

Foreign trusts were thrown into the spotlight this morning, when New Zealand was named in a massive leak of documents from Panamanian law firm Mossack Fonseca.

According to The International Consortium of Investigative Journalists, the 11.5 million document trove show that the law firm’s services appear to have been used to “facilitate massive money laundering, tax avoidance and criminal activity, including drugs and arms dealing”.

While ths country is named by the ICIJ as a “tax haven” used by Mossack Fonseca, New Zealand entities only make up a tiny proportion of those cited in the scandal.

Critics are quick off the mark:

New Zealand is complicit in tax avoidance schemes, says an academic.

“It’s shameful for New Zealand to be caught up in international tax avoidance,” Deborah Russell from Massey’s School of Accountancy said this afternoon.

“The loophole in our laws that allows New Zealand foreign trusts to escape taxation has been known about for years, but nothing has been done to shut it down. This makes us complicit in schemes to avoid tax,” she said.

It’s fair to point out that Russell was a Labour candidate last election.

Another tax law expert has also said that the rules around the what foreigners with New Zealand trusts must disclose to Inland Revenue are “weak”.

Revenue Minister Michael Woodhouse, however, said it was “ridiculous to suggest that New Zealand is a tax haven”.

“Tax havens thrive on secrecy,” Woodhouse said.

“Our tax rules require foreign trusts to be registered. We also have a strong tax treaty network with the express purpose of discovering and preventing tax avoidance by exchanging information between tax jurisdictions,” he said.

There’s sure to be a lot more to be said about this, both internationally and in New Zealand.

Leave a comment

128 Comments

  1. Firstly, real trusts are not persons and are not liable for tax, and secondly those named so far seem to have been selected in a similar way that the WikiLeaks data was selected (hat tip to Webster Tarpley for that).

    Reply
    • Patzcuaro

       /  4th April 2016

      “Firstly, real trusts are not persons and are not liable for tax”

      I’m no expert but I think trust are liable for tax but that it can be passed along with income to beneficiaries.

      Reply
      • Yeah, that’s what the predators like you to believe. Trusts operate in equity, not in law, and trustees have no obligation to the state (unless you’re silly enough to set up a statutory trust).

        Reply
        • Ratty

           /  5th April 2016

          You are right about being set up in Equity, you are 100000% incorrect if you are excluding it from being a tax payer, your concepts are mixed up.

          Reply
          • No, taxpayers are persons and trusts are not persons. An enforcement officer from a District Council admitted to me that trusts are not persons. There is no basis in law or in equity for taxing a trust.

            Reply
            • Ratty

               /  5th April 2016

              Yes there is a basis in Statute for taxing a Trust..

              Its called the Income Tax Act 2007

            • Ratty

               /  5th April 2016

              Trusts are persons.. just not Natural Persons ( like Companies).. but that term was done away with in 2007 .

            • Its called the Income Tax Act 2007

              That only applies to the nett income of persons.

              Trusts are persons..

              Wrong.

              person includes a corporation sole, a body corporate, and an unincorporated body

              Link

  2. Alan Wilkinson

     /  4th April 2016

    How was it hacked? This has the scent of a government agency job given the size of it.

    Reply
    • Clemgeopin

       /  4th April 2016

      So, you are unhappy with the massive leak of the Panama Papers, “the secrets of dirty money” indulged by the rich pricks and powerful leaders and corrupt crooks around the world? You prefer that such a public service exposé does not take place?

      Reply
      • Pantsdownbrown

         /  4th April 2016

        I’m not sure Alan is saying that at all but merely questioning the other side of interest – who hacked it and for what reason?

        Also from information gleaned so far New Zealand is but a mere footnote in the whole sordid affair so hardly worth the academic coming out and abusing our part in it.

        Need far more information before jumping to conclusions.

        Reply
        • Clemgeopin

           /  4th April 2016

          “I’m not sure Alan is saying that at all”

          Don’t know. I couldn’t answer his questions.
          Want to know if he can answer mine.

          Reply
          • Pantsdownbrown

             /  4th April 2016

            Maybe you should ask Alan if he can forward you his private phone number so you can have a one-on-one with him rather than talk openly on a public forum……..

            Reply
            • Pantsdownbrown

               /  4th April 2016

              He might even invite you around for tea?

        • Oliver

           /  4th April 2016

          Who ever hacked should be given a medal. Maybe it’s was rawshark.

          Reply
      • Iceberg

         /  4th April 2016

        ” public service exposé”

        Perhaps you could give us a list of who’s information should be made public? That would held us greatly with the lynchings.

        Perhaps when we’ve done lynching all of those on your list, we should check that you and everyone you know is squeeky clean.

        Reply
        • Clemgeopin

           /  4th April 2016

          No not lynching, but if the info is correct and the arseholes have dodged their nations and stolen money, dodged taxes, laundered money, the buggers should be investigated, hauled before courts and if found guilty their money/property should be repossessed if possible and the crooks should be jailed for a few life times like in USA , like they did to Bernard Madoff who got caught out for his economic crimes.

          Bernard Madoff:
          150 years imprisonment and forfeiture of $17.179 billion.
          Incarcerated at Butner Federal Correctional Institution; Federal Bureau of Prisons Register #61727-054; Scheduled date of release: November 14, 2139.

          https://en.wikipedia.org/wiki/Bernard_Madoff

          Reply
          • Clemgeopin

             /  4th April 2016

            “Scheduled date of release: November 14, 2139”

            I bet he, like Robinson Crusoe, is methodically and patiently crossing off the date each day waiting for his glorious date of freedom, November 14, 2139, to jump with indescribable joy!

            But I wonder if the millions of people he deceived will be eagerly waiting for him just outside the jail door on that happy/fateful day.

            Reply
          • Pantsdownbrown

             /  4th April 2016

            Well who would have thought? FIFA officials and high ranking Russians corrupt?

            Reply
          • Iceberg

             /  5th April 2016

            Why bother with the courts, you seem to have convicted a whole bunch of people you don’t even know? We already know the trusts set up in NZ are legal.

            Is there a certain level of income by which people should be exposed and we don’t bother with courts? We could call it the Clemgeopin Doctrine.

            Maybe we could have a lower limit as well. So anyone on a benefit is automatically a lazy, tax dodging, drug addict.

            Reply
            • Corky

               /  5th April 2016

              Well said. Forgotten in the stampede to convict is the fact there are legitimate reasons to use these trusts. And setting them up is not illegal.
              As I said before, this is a great opportunity for socialists to put the boot in.

      • Alan Wilkinson

         /  4th April 2016

        When we know who did it and why we will know if it is a public service or not. My first guess would be a US intelligence or Mossad hit as they have the resources and possibly motive.

        Reply
        • Lilly Franks

           /  5th April 2016

          2.6 terrabytes will fit on a hard drive that can be bought for $100, and on a 100 Mbit/s connection would only take 62 minutes to download.
          The thing with data is it’s democratic, the kid in the basements 2Tb takes up the same cheap affordable space as Mossad’s, and the dodgy law firms security is no better than anyone else’s.
          At the end of the day I bet that like Snowden and Manning, this will be an inside job.

          Reply
          • Alan Wilkinson

             /  5th April 2016

            Maybe, but I still think there is a fishy smell and none of this happened by accident. I suspect American govt fingerprints on the hack whether via an insider or not. It seems to be very comprehensive, database plus emails. Someone was all over their servers.

            Reply
            • Lilly Franks

               /  5th April 2016

              Their data was all neatly stacked in folders named by client and containing everything relating to that client – emails, pdf’s of contracts, photo’s etc, no need for deep inspection they had it all laid out.

            • Gezza

               /  5th April 2016

              Hmm. Interesting. Uggers? Whaddya think?

            • Cui bono?

              Rothschild, the centuries-old European financial institution, has opened a trust company in Reno, Nev., a few blocks from the Harrah’s and Eldorado casinos. It is now moving the fortunes of wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt.

              Link

            • Alan Wilkinson

               /  5th April 2016

              @Lilly, but was that the source layout or just the presentation layout for the media dump? Was it from a proprietary client management system database that has been exported in a convenient form for the media?

            • Lilly Franks

               /  5th April 2016

              From the link above….”this is the leak” (I suggest you read it, the whole story is there)
              “The leaked data is structured as follows: Mossack Fonseca created a folder for each shell firm. Each folder contains e-mails, contracts, transcripts, and scanned documents. In some instances, there are several thousand pages of documentation.”
              So according to the people who received it, it was all laid out in Panama. The journalists have spent a year running PDF files through “Optical Character Recognition’ software to make them searchable ( they were scans of paper documents) and then running it through an indexer to make it easily searchable.

            • Alan Wilkinson

               /  5th April 2016

              “In the months that followed, the number of documents continued to grow far beyond the original leak. Ultimately, SZ acquired about 2.6 terabytes of data, making the leak the biggest that journalists had ever worked with.”

              This suggests the leak was being constructed over time for maximum impact. I would take the comment “Mossack Fonseca created a folder …” as merely an unjustified assumption.

            • Lilly Franks

               /  5th April 2016

              An unjustified assumption from the person who was actually handed the data, and is in the rare position of knowing exactly how it was formatted.
              The drip-feeding over months, is a matter of estimating trust. If you are unsure you’ll be handed to the authorities you’re not going to hand over everything that you have.

            • Alan Wilkinson

               /  5th April 2016

              “If you are unsure you’ll be handed to the authorities you’re not going to hand over everything that you have.”

              Really? I would have thought quite the reverse.

              The person who receives the data knows only how it was formatted on arrival. I would be amazed if this obviously professional job had not taken steps to obscure the sources and means of access by removing all clues to that. The mix of items from obviously different sources strongly suggests significant effort went into preparing for the release and this is supported by the timespan over which it was drip fed.

              But hey, that’s just my semi-professional opinion.

            • Lilly Franks

               /  5th April 2016

              “But hey, that’s just my semi-professional opinion.”
              Is that a semi-professional hacker or a semi-professional Mossad Agent or a semi-professional receiver of stolen data?

            • Alan Wilkinson

               /  5th April 2016

              @Lilly, just an old ex systems programmer with a bit of knowledge about how corporate systems get put together and operate.

            • Lilly Franks

               /  5th April 2016

              So you ‘used’ to have ‘some’ idea about ‘something else’. I bow to your expertise on the matter, you’re clearly not just taking guesses about the secret service from under your tin-foil hat.

            • Alan Wilkinson

               /  5th April 2016

              @Lilly, do you have to resort to personal attacks in lieu of debate?

            • Lilly Franks

               /  5th April 2016

              I figured you were too stuck in your “it must be a government” thing to really want a debate, and once someone says ” that’s just my semi-professional opinion” you know they’re not debating, they’re trying to give you a lecture.
              As for personal attacks, you can give but not receive, is that how it works?

            • Alan Wilkinson

               /  5th April 2016

              I’ve received plenty, Lilly. I’ll add yours to waste basket.

    • Pete Kane

       /  5th April 2016

      Nicky Hager was interviewed (RNZ I think) a while back about a very large number of ‘investigative’ journalists working on this. I think funded out of a foundation in the States.

      Reply
  3. Klik Bate

     /  4th April 2016

    Some of the most prominent political leaders linked with the PanamaPapers……so far

    Reply
    • Oliver

       /  4th April 2016

      No doubt Key had something to do with it. It matches his MO.

      Reply
      • Pantsdownbrown

         /  4th April 2016

        Maybe Andrew Little ‘strong-armed’ some banks…….

        Reply
  4. Oliver

     /  4th April 2016

    Another blunder from Keys National Party. Hopefully Labour will capitalise on Keys mistakes.

    Reply
    • Pantsdownbrown

       /  4th April 2016

      If you are only going to troll at least make it a little less obvious…….

      Reply
    • Oliver

       /  4th April 2016

      Well they have done nothing to close these weak tax loopholes which criminals are exploiting. They have to bear some responsibility.

      Reply
      • Clemgeopin

         /  5th April 2016

        “Well they have done nothing to close these weak tax loopholes which criminals are exploiting”

        That is assuming some of them are not money crims themselves!

        Reply
  5. Brown

     /  5th April 2016

    Whoever leaked this should be very worried – and rightly so in my view. There will be people on this list who will get even. Much of the stuff will be perfectly legal (tax avoidance is) and all this bleating about the rich is becoming tiresome. Maybe the answer is for govts to stop fleecing people so much and wasting the money? Sales taxes replacing income taxes would also fix this. What govts really hate is the lack of control – its not just about the money. If all you lefties like tax so much just pay more. Waht? You need a law to make you do what you think is right?

    Reply
  6. Clemgeopin

     /  5th April 2016

    Reply
    • Alan Wilkinson

       /  5th April 2016

      Puerile Gower tripe as usual. Interview people who have zero clue about taxation complexities to come up with meaningless opinions that suit his narrative.

      Having watched that, can you explain anything at all about how NZ trusts can be used for tax evasion? The only honest answer is “Not a thing” but I don’t expect that from you.

      Reply
    • Oliver

       /  5th April 2016

      “Tax avoidance” what a crock. Just has to be the worst lie that Key has ever told. Maybe we should all follow the National governments example and avoid paying tax. The hypocrisy from John is infuriating. Oh well he’s certainly ended his chances of staying in politics. Hopefully Little has a plan to sort JKs mess.

      Reply
      • Alan Wilkinson

         /  5th April 2016

        Did Gower interview you, Oliver? You seem to be made to measure for his programme – mega opinion backed by zero knowledge.

        Reply
      • Oliver

         /  5th April 2016

        John Key in damage control mode.

        – by scoop nz

        “At his post-Cabinet press conference yesterday, Prime Minister John Key ran through the gamut of his Five Basic Crisis Management ploys. In no particular order…
        (a) There’s no problem here, move on. The OECD gave us a clean bill of health back in 2013, Key claimed. End of story. In fact, the IRD warned government in 2013 of the reputational risk to New Zealand from a disclosure regime around foreign trusts that compared poorly to those being operated by other similarly developed countries.
        (b) Muddy the pool with irrelevancies. “In other words,” Key said yesterday, “it’s all about making sure New Zealanders pay their fair share of tax”. No, it isn’t. It’s about foreigners abusing our reputation, and it’s about us not living up to our international obligations. The G7 for instance, has set up a Financial Action Task Force (FATF) that sets international standards on money laundering and fighting terrorism financing. We are almost certainly in breach of these standards. Unfortunately, New Zealand is not due to be formally monitored by the FATF until late 2019.
        (c) Blame Labour. The same system, Key said, has been in place since 1988. Obviously though, the world has moved on since 1988 when it comes to cracking down on money laundering and terrorism financing.
        (d) It is a very complex issue. Yeah, right.
        (e) Don’t ask him, he hasn’t been briefed on this…. And so on.
        In fact, this same problem has existed for almost a decade, and we put out the welcome mat for it ourselves. With almost comical naivete, Treasury’s then-Secretary John Whitehead gave a speech in 2005 that celebrated the turning of New Zealand into a shonky tax haven as being a triumph of Kiwi ‘can do” ingenuity”

        Reply
        • Alan Wilkinson

           /  5th April 2016

          – Gordon Campbell, senior NZ loony Left journalist. Expect balanced reporting from him? Yeah, right.

          Reply
  7. Nelly Smickers

     /  5th April 2016

    Reply
  8. PeteKane

     /  5th April 2016

    http://www.radiolive.co.nz/What-is-the-purpose-of-tax-havens/tabid/506/articleID/117908/Default.aspx

    “Mark Sainsbury talks with Dr Deborah Russell about the purpose of tax havens in the wake of the leak of the so-called “Panama Papers”

    Reply
    • Alan Wilkinson

       /  5th April 2016

      The critical info comes right at the end of the interview and is not properly analysed. NZ tax trust law is that income for the trust is taxable in the country of residence of the Settler who funds it. This means that NZ residents are taxed on their overseas trusts. It also means that overseas residents should be taxed in their country of residence. So NZ is not a tax haven at all, it is the overseas countries of residence that supposedly are not taxing trusts created by their own residents.

      Wouldn’t it be nice if there was a smidgeon of honesty in our journalists?

      Reply
      • Gezza

         /  5th April 2016

        Seems to me problem of tax avoidance is arising because the income/assets are not being declared in the owner’s overseas country. Nor are they getting declared here because there is no requirement for that. How the assets get transferred here undetected interests me. I think the assets and owners should be declared here. That means they’ll no longer hide their assets here but as we appear to be getting nothing out of that except maybe a few jobs for arseholes, no great loss. At least our reputation for being a country of quite low levels of corruption by officials is preserved.

        Reply
        • Ratty

           /  5th April 2016

          Gezza..

          No assets are received in New Zealand . NZ only acts in an Administrative role, just a paper entry..

          And in saying that, NZ Trusts are sorta the same in that Assets are only required to be disclosed by value in an IR10, and Accounts are only required if the Trust Deed dictates …the Legalities of conveyancing though is a different storyand applies in all countries

          Reply
      • Gezza

         /  5th April 2016

        Wouldn’t it be nice if there was a smidgeon of honesty in our journalists?

        The point the journos are all making is to ask whether, if filthy rich overeas pricks (in the sense of tax evaders) are, through corrupt means in their own country able to transfer taxable assets here, without their being taxed in their own countries, why are we assisting them to commit crimes in their own countries? That seems a reasonable question.

        Reply
        • Alan Wilkinson

           /  5th April 2016

          Are they transferring taxable assets here? AFAIK all they are transferring here is registration and administration of the trust. If the assets come into our institutions they are subject to all the money-laundering and identification requirements NZ imposes on them so I doubt any dubious sources would want that.

          Reply
          • Gezza

             /  5th April 2016

            Deborah Russell is saying very clearly all that has to be declared to IRD are the names of the trustee and the trust. The context of the interview with Cuddly Bear is quite clear and she educates him as to why these trusts are not tax havens. Were they required to declare taxable assets she would have clearly said so. What is it about you Lockwood Horror-waving righties?

            Reply
            • Alan Wilkinson

               /  5th April 2016

              It is that we understand the difference between administration and investment. Try opening a NZ bank account without full disclosure or transferring large amounts of foreign money into it without the same and without IRD being informed. Won’t happen.

            • Gezza

               /  5th April 2016

              I can’t see what benefit there might be for a foreign settlor to establish a Trust in New Zealand for “administration” purposes. There seem to be obvious benefits in doing so for the purpose of massive tax avoidance and tax evasion (I’m ethically against both). Debs explains it all in a bit more detail here.

              http://deborahfrussell.net/2016/04/04/whats-going-on-with-foreign-trusts/

              I find it hard to believe that a senior lecturer in accountancy would state that it is possible to channel money through a New Zealand Trust without paying tax on it were it not the case that it is actually possible. I have not yet heard any official or Minister specifically state that it is absolutely not possible.

            • Alan Wilkinson

               /  5th April 2016

              You might start by explaining what you mean by “channelling money” and what tax you think should be applied to that money that is not.

            • Gezza

               /  5th April 2016

              This, from Pete’s linked article in his Post, seems to explain how the channeling of funds via the NZ trust is done to evade due tax is done. The assets are presumably just moved through the banking system. Presumably why they don’t have to be declared.

              University of Auckland professor and tax law specialist Craig Elliffe said, for instance, a wealthy South American family could settle $200 million in a New Zealand trust, which then invests those funds in a Panamanian company.

              “The question is, does the South American country have any right to tax their residents where they’ve settled a foreign trust? And often the rules will be such that the answer to that question is ‘no, they don’t have the right’,” Elliffe said.

              While New Zealand doesn’t have any specific secrecy laws blocking another country getting information about foreign trusts, the rules around what these trusts must disclose are “weak”, Elliffe said.

              “In fact it is so weak that it is actually almost dangerously weak,” he said.

            • Alan Wilkinson

               /  5th April 2016

              Simply as I said. The money never comes anywhere near NZ and is not “channelled through it” in any meaningful way.

              If the foreign country has a tax law that says trust income is taxable only if the trustees are resident in that country why is this NZ’s problem or fault in any way?????

            • Gezza

               /  5th April 2016

              The money effectively passes through the hands of the NZ trustee who is the “owner” of it so it avoids due tax in NZ and in the settlors/beneficiaries’ countries. IOther countries apparently do not permit these types of Trusts to be set up so they do not allow tax to be avoided in this way. I get it that you see no problem with this because your ethics are different from those of me & others who consider this is wrong and NZ shouldn’t permit it.

            • Alan Wilkinson

               /  5th April 2016

              Your position is ridiculous. The money does not in any sense belong to New Zealanders and is not in New Zealand so there is no basis for it being taxed by New Zealand.

              So the matter is entirely in the hands of the foreign country which has decided not to tax it. So your ethics tell you exactly what? That you are entitled to abuse our Government about it?

            • Alan Wilkinson

               /  5th April 2016

              And the Trustee is NOT the owner of the money, merely the administrator bound to manage it in accordance with the terms of the trust settlement and for the benefit of the trust beneficiaries. (Also the Trustee may be one of multiple people or entities not necessarily all in NZ.)

            • Gezza

               /  5th April 2016

              The complaint is not about New Zealand not taxing an income/asset transferred to a New Zealand by some rich & dodgy arseholes overseas. The complaint is that New Zealand law is complicit in allowing rich or dodgy arsehole overseas to avoid / evade paying tax on their assets anywhere.

              I am not abusing the New Zealand government about this. That is you hyperventilating again because of your pathology. I am saying our Government should not allow this. Many people consider this is unethical behaviour when it is entered into solely for the purpose of avoiding tax on their assets which would otherwise have to be paid in their own country. I think it is unethical. You do not. I express my opinon, as do others, and I then wait for the vitriolic abuse that I expect you to heap upon my head and you don’t disappoint.

            • Alan Wilkinson

               /  5th April 2016

              You are simply completely and totally wrong from start to finish. Our Government is correct in its tax treatment in that it taxes NZ residents and beneficiaries, not overseas income for overseas residents and beneficiaries wherever that is administered. The discussion to date is of jurisdictions that have decided not to tax income administered by overseas trustees. In those cases the location of a trustee in any other country removes liability for local tax. NZ has no specific role other than to provide an honest legal system and administration.

            • Gezza

               /  5th April 2016

              Just one small point here

              And the Trustee is NOT the owner of the money, merely the administrator bound to manage it in accordance with the terms of the trust settlement and for the benefit of the trust beneficiaries.

              I was relying on this definition in respect of trusts:”The assets transferred to the trustees become their property, but they hold the assets on trust for the beneficiaries. The trustees are therefore the nominal owners of the property, but they have a legal obligation to deal with the property in the manner set out in the trust deed.”

      • Deborah Russell Labour candidate for Rangitikei overlooked of course.

        Reply
        • What she thinks of John Key – but this isn’t political it’s ACADEMIC of course.

          http://deborahfrussell.net/2015/12/17/thats-not-funny/

          Reply
          • Gezza

             /  5th April 2016

            What does this have to do with her view that our rules on trusts allow them to be used for tax avoidance and tax evasion?

            Reply
            • Alan Wilkinson

               /  5th April 2016

              That is certainly in question. One presumes it is rather central to her being the media “go to expert” on the subject.

            • Gezza

               /  5th April 2016

              But she’s not the only one. There’s another expert in tax law (University of Auckland professor and tax law specialist Craig Elliffe) quoted in Pete’s article, for example. Can you give us a link to someone else who’s stating where and how they’re wrong?

            • Everything.

            • Gezza

               /  5th April 2016

              That’s not an argument that’s a brain fart.

            • The Herald wasted no time yesterday in seeking her opinion. They failed to mention her political aspirations. It is so disingenuous.

              I suggest that Gavin Ellis (speaking in RNZ this morning)and his lamentations re the huge drop of 46% trust in the NZ Press take this type of bias into account.

            • Gezza

               /  5th April 2016

              That’s just a longer brain fart.

          • Gezza

             /  5th April 2016

            Give us your link to the other tax experts stating where and how the two experts quoted in the Herald are wrong Traveller.

            Reply
            • “The 2007 rewrite of the Income Tax sets out how overseas people can set up in trusts in New Zealand and pay no tax provided that none of the income in the trust originates in New Zealand.

              In 2005 Labour’s Finance Minister, Michael Cullen, tightened up reporting requirements for the trusts but emphasised that their activities would remain tax free.

              He said: “”Foreign trusts will be required to have an IRD number, keep records for New Zealand tax purposes, provide certain information when they are first set up in New Zealand or appoint New Zealand trustees, and provide information to Inland Revenue on a regular basis.

              Under New Zealand law, foreign income derived by non-residents is outside the New Zealand tax base, and rightly so. The government has no intention of changing that. “Because they are not taxed here, foreign trusts that are set up here do not have to file New Zealand income tax returns or keep records if they receive only foreign-sourced income.“

            • Gezza

               /  5th April 2016

              What does this have to do with Russell’s and Elliffe’s view that our government’s rules allow NZ Trusts to be used by people overseas to evade or avoid paying tax on their assets? And that they should at least close the loopholes that allow this by requiring collection and disclosure of relevant information to overseas tax authorities?

            • Alan Wilkinson

               /  5th April 2016

              “they should at least close the loopholes that allow this by requiring collection and disclosure of relevant information to overseas tax authorities”

              As discussed, the loophole appears to be in the law of the overseas tax authorities. Until there is evidence that overseas laws are being breached there is no basis for claiming disclosure is relevant.

        • Oliver

           /  5th April 2016

          All I know is if NZ held an election tomorrow Labour would win by a landslide. National party are in crisis mode, I don’t think they will be able to recover from this. The damage is too severe. That’s my unbiased opinion.

          Reply
          • Gezza

             /  5th April 2016

            I don’t think so Oliver. Little’s not articulate, witty, smart or popular enough with the average really dumbed down heavily propagandised for decades voter to be voted in as PM.

            Reply
          • Alan Wilkinson

             /  5th April 2016

            For unbiased read idiotic.

            Reply
          • Your “unbiased” opinion is so wide of the reality and the polls to warrant psychiatric help.

            Reply
  9. PeteKane

     /  5th April 2016

    I can think of one particular politician, with a very long interest in tax affairs, who will be looking forward to Question time. I suspect the post of High Commissioner to the Court of St. James will seem particularly appealing to a certain Speaker today.

    Reply
    • PeteKane

       /  5th April 2016

      Actually Dunne has been the long term Minister under both sides – so Winston/canary stuff really.

      Reply
  10. Oliver

     /  5th April 2016

    It looks like Jhonny boy got his wish to leave a legacy. The National Party helped facilitate the biggest money laundering ring in human history. They helped organized criminals launder money, evade tax, and trade arms on the black market.

    You got your legacy JK.

    Reply
    • Oliver you really do need to out your foot int the waters of TRL. Not for the first time your accusations are defamatory. You need to be subjected to some accountability.

      Reply
  11. Alan Wilkinson

     /  5th April 2016

    The 10 most popular tax havens in the Panama Papers

    BRITISH VIRGIN ISLANDS
    PANAMA
    BAHAMAS
    SEYCHELLES
    NIUE
    SAMOA
    BRITISH ANGUILLA
    NEVADA
    HONG KONG
    UNITED KINGDOM

    New Zealand doesn’t figure. Samoa, Niue and the UK do.

    http://www.telegraph.co.uk/business/2016/04/04/panama-bombshell-spells-demise-of-shadow-finance-and-privacy/

    Reply
    • Gezza

       /  5th April 2016

      It’s not how popular we are as a tax haven that’s at issue. It’s whether we are assisting people overseas to avoid paying tax on their assets (which may include criminally-earned assets) and whether that’s ethical that has been raised as an issue.

      Reply
      • Alan Wilkinson

         /  5th April 2016

        You keep saying assets, but income is taxed, not assets. You keep saying we assist people overseas to avoid paying tax but we don’t, it is their own governments that have chosen not to tax them. Is it ethical of you to persistently lie?

        Reply
        • alloytoo

           /  5th April 2016

          Perhaps Gezza views other people’s assets as his income, hence the confusion. I myself confess confusion over this issue. Since when did it become IRD’s mandate to ensure tax compliance for the rest of the world?

          Strange transfers through our institutions would attract attention via money laundering laws irrespective of trust law.

          Seem to me that this is a storm in a teacup with a healthy dollop of faux outrage.

          Reply
        • Gezza

           /  5th April 2016

          Thank you for the correction, please mentally substitute my references to “assets” with “income”. It will be interesting to see whether and where this story goes on from here.

          Reply
    • Corky

       /  5th April 2016

      I would add Luxembourg and Mauritius.

      Reply
  12. Zedd

     /  5th April 2016

    This isn’t exactly new.. there was a ‘brief’ new item on TV several months ago, that NZ was allowing foreign companies to ‘hide their income in family trusts’. Of course ‘Team Key’ just brushed it off as ‘not an issue’ even though there were comments from other countries that it is ‘unethical’ & was a similar thing to other ‘infamous tax havens’ :/

    Reply
  13. Klik Bate

     /  5th April 2016

    Mind you, when you consider it’s been reported that the ‘Super Rich’ have accumulated in excess of $20 TRILLION in secretive offshore accounts, the numbers are staggering!

    Their wealth is protected by a highly paid industrious bevy of professional enablers in the private banking, legal, accounting and investment industries, all taking advantage of the increasingly borderless global economy. It’s been calculated that if the $20 Trillion that has been offshored earned 3% a year, and that was taxed at 30%, it would have raised in excess of $185 billion in revenues. Eye-watering stuff!!

    Reply
    • Gezza

       /  5th April 2016

      The core enablers are the politicians who make the tax laws.

      Reply
  14. PeteKane

     /  5th April 2016
    Reply
    • Alan Wilkinson

       /  5th April 2016

      Winston didn’t get far, did he?

      Reply
      • Gezza

         /  5th April 2016

        It would be interesting to see the advice from MBIE and Treasury expressing concern about tax haven activity in New Zealand that he refers to though. You never know with Winston how accurately he’s describing officials’ advice he refers to. I wonder if that’ll be made available over the next few days.

        Reply
      • PeteKane

         /  5th April 2016

        Perhaps you boys could mount a joint attack from the North? (I know Winston speaks very highly of you) As an aside I thought the greens made a huge era of judgement in appointing this one as finance spokesperson. It’ not just an ability question it seems to me a maturity issue. Perhaps I’m being to harsh?

        http://www.inthehouse.co.nz/video/42458

        Reply
        • PeteKane

           /  5th April 2016

          That was replying to Alan.

          Reply
        • Alan Wilkinson

           /  5th April 2016

          I guess it’s far too much to ask, but wouldn’t it be good if Parliament spent some time on constructive analysis and suggestions rather than foxing and boxing?

          Reply
          • PeteKane

             /  5th April 2016

            Actually to be fair Genter’s comeback to the PM (ie disappointed) was a good one. David C took it all in pretty good spirit today but you can actually sense the contempt for which he hols Ron Mark (and actually there’s a few on his own side which he seems to hold likewise). Mind you Mark can be a particularly annoying little p……. when he so chooses.

            Reply
          • Gezza

             /  5th April 2016

            It’s Carter that’s the problem. He’s be the most partisan ignorant & useless Speaker we’ve had in my lifetime.

            Reply
  15. Klik Bate

     /  5th April 2016

    NBC reports, “thousands protesting outside Parliament in Reykyavik after PM’s implication in the PanamaPapers”…….

    Hopefully we might get to see Pussy Riot outside the Kremlin 🙂

    Reply
  16. Brown

     /  5th April 2016

    ”… some rich & dodgy arseholes overseas …”’

    And here we have it spelt out by Gezza. Envy is a horrible thing. All you lefties that hate money should sell off the I Phone, I Pad, I Tampon etc… and close you facebook and twitter accounts but being stinking useless whining hypocrites you won’t. The golden rule with money is that a workman is worth his wages and they are his to spend. Taxes should all be consumption taxes – we could have our privacy back as I’d have no rebates for anything.

    Reply
    • Gezza

       /  5th April 2016

      No no I’m not saying all rich people are arseholes, Browners. And I’m not saying all rich people are dodgy either. But I don’t much care for the rich ones who are dodgy and who are arseholes. Are you one of these? If you are I can understand your agitation, but if not, why are you whinging about me?

      I’m fond of money, I wish I had more of it, I’d maybe give some of it away because it would make me feel good, but the pursuit of it doesn’t dominate my life so I haven’t been strongly motivated to make huge amounts of it.

      I think all income should be taxed. It’s the rate setting that’s the problem because people on low incomes should have enough left after tax to live on.

      Reply
  17. Alan Wilkinson

     /  5th April 2016

    I see the Register is reporting the documents came from an email server hack. There are some fishy aspects to that too since apparently documents date back 40 years and many had to be OCR’d from images. Seems unlikely these would have been stored and retained in their email server.

    Reply
  18. Alan Wilkinson

     /  5th April 2016

    Another peculiarity seems to be the missing Americans – has the data released been filtered to exclude American clients? If so, why?

    Reply
    • Pantsdownbrown

       /  5th April 2016

      I initially thought the same thing……….Putin hit job?

      Reply
    • Mossack Fonseca: The Nazi, CIA And Nevada Connections… And Why It’s Now Rothschild’s Turn

      Link

      Reply
      • Alan Wilkinson

         /  5th April 2016

        Interesting, UT. That would certainly explain it. No point in shopping too many of your best potential customers.

        Reply
  19. Robby

     /  5th April 2016

    Can someone please explain to me what the problem is with this? Some wealthy people have decided to create trusts to store money here, If the trust makes a profit in NZ, it pays tax on that profit, right? It looks to me like nothing more than accountants doing what they are paid to do, which is work within the law to minimise their clients tax liability.
    Personally, I suspect it may just be a convenient distraction from another local story

    Reply
    • Trusts are not commercial ventures, they don’t make a profit in the usual sense of the word. The operation of a trust involves the equity of the trust being administered by the trustees of behalf of the beneficiaries. If that equity increases or decreases the gain or loss belongs to the beneficiaries, there’s no basis in law or in equity to tax a trust. The problem is with sham trusts, i.e. trusts that don’t have a basis in good conscience.

      The secular state can’t address these issues without it’s fundamental defects becoming apparent, so you end up with artifices like statutory trusts and “trust law”.

      Reply
  20. lurcher1948

     /  6th April 2016

    Its all right when the right do it………

    Reply
    • Gezza

       /  6th April 2016

      It’s just one of those facts of life.
      According to the right, the left never do anything right.
      And according to the left, the right never do anything left and that’s not right.

      Reply

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