‘Extremely damaging’ tax haven label

On Q & A today Peter Dunne said that if the label of ‘tax haven’ sticks it could be very damaging to New Zealand.

Opposition parties Greens and Labour have been promoting the label in their attacks on the Government and John Key. Key disputes the description, saying that it doesn’t apply to New Zealand.

TVNZ: Peter Dunne – tax haven label ‘extremely damaging’

Former Revenue Minister Peter Dunne told TV One’s Q+A programme, ‘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. As you said, we’ve had a very good reputation for a long period of time for a very robust, very transparent and a very open tax system – good rules, a clear guidance, etc’. That is being potentially misused in these situation.

Mr Dunne told the programme, ‘ we’ve got to get to the bottom of is the extent of the activity, what the profile of people using these trusts is, what the implications are for our reputation, and how we work in concert with other countries to make sure, as I say, a robust international system can be developed to combat them.’

Mr Dunne said had the IRD had concerns about this country’s international reputation when he was in the job he would have taken them ‘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.’

Interview here.

Labour and Greens have already put attacks on the Government ahead of the good of the country with their attacks on the partial asset sales in 2013, with a number of allegations they drastically reduced the value of the assets that went to market.

How much risk is there that the tax haven label will stick internationally?

Should parties be taking that risk?

Is trying to damage Key’s reputation justified no matter what the risk to the country is?

In Dunne concerned about “extremely damaging” tax haven label – years too late Notices and Features (aka Labour Party?) at The Standard thinks that it’s Peter Dunne who is “waking up at last”. Is it Dunne who is asleep to the risks, or is it Labour?

But who has been promoting the ‘tax haven’ label? Labour and Green parties, MPs and activists.

What is potentially the most damaging, New Zealand’s laws relating to overseas trusts and tax, or establishing a perception that New Zealand is a tax haven?

Leave a comment

78 Comments

  1. Iceberg

     /  1st May 2016

    They can’t do any damage. Key has global cred. The rest are just playing in a sandpit.

    Reply
    • Kitty Catkin

       /  1st May 2016

      People will see that we’re not a bona fide tax haven like Jersey and, I think, Monaco, which are open and above board-and if we were going to be a tax haven, we’d be fools not to do as they do. Anyone who believed in what Peter Dunne et al are saying will have a rude awakening should they try anything. It’ll be the proverbial 9 day wonder as people who know see how little truth there is in this. Peter Dunne et al are unlikely to have much cred in international financial circles. They are the mice that roared.

      Reply
    • Blazer

       /  1st May 2016

      ‘ Key has global cred’…sure does ..bucko..with his central bank handlers in the ‘City and Wall St.

      Reply
      • Kitty Catkin

         /  1st May 2016

        Tax havens are quite legit. All they do is offer legitimate businesses low tax rates. I can’t imagine my late in-laws, who were ultra-conservative, having money in Jersey if it wasn’t above board. Why are all these people acting as if being a tax haven is one step up from a protection racket ? I would have no worries if we WERE one-lots of money coming in. The haven must make something from it, or they wouldn’t bother-they aren’t doing it as a favour to the people who keep money there.

        Reply
  2. jamie

     /  1st May 2016

    “What is potentially the most damaging, New Zealand’s laws relating to overseas trusts and tax, or establishing a perception that New Zealand is a tax haven?”

    One follows the other.

    If there is no truth to the claims, the perception won’t stick. Or it will backfire on the opposition, or both.

    If there is truth to them, then keeping quiet isn’t going to help us one bit.

    It seems that people are using our trusts because of the level of secrecy we offer. At least that’s how the industry promotes itself. That was never going to be a good look for NZ so it’s a bit rich to blame the perceptions on those who want the situation changed rather than those who are actually operating and profiting from this system.

    Reply
  3. @ PG – “…ahead of the good of the country” and “Should parties be taking that risk? Is trying to damage Key’s reputation justified no matter what the risk to the country is?”

    Yep, I agree. Key’s rep is paramount. So just on this ONE occasion EVER (aside from world wars) we should put party politics aside, [violins] all act in unison and speak with one ‘Kiwi’ voice, [cellos] for the good of ‘our’ country, [drum roll] the future of the economy we all share, [heavenly choir] the honour of the great nation ….. [cacophony, fade] … Yeah …. Right!

    Oh, sorry … I might be at the wrong sound-stage? Is this the Tui commercial?

    Reply
    • Pickled Possum

       /  1st May 2016

      @ Parti my friend
      You are so funni also … correct
      As always 😉

      Reply
  4. Kitty Catkin

     /  1st May 2016

    Tax havens in Europe include the UK (not just Jersey and The Isle of Man, either), Ireland, Switzerland, Sweden, Denmark. Luxembourg, Austria, Holland….all openly tax havens for overseas companies to keep money in, all reputable countries, all quite different to the cliched tropical island (although the Cook Islands and Niue are among the ones that are) Two American states are, Delaware and another that I have forgotten.

    I don’t know what a tax shelter is, as opposed to a tax haven, but being a tax haven is quite acceptable and perfectly legal, so I don’t know why Peter Dunne and Labour’s knickers are in a knot at the thought that we might be classed with all these places.

    Reply
    • Blazer

       /  1st May 2016

      why do we need tax havens ?over to you KCK.

      Reply
      • Comment of the day Blazer.

        Reply
        • Brown

           /  1st May 2016

          Only if you are a moron. We have tax havens because govts are wasteful and greedy. If we were one with sound laws and ethics we would boom with wealthy people indulging themselves here.

          Reply
          • Blazer

             /  1st May 2016

            so this govt is ‘wasteful and greedy’..got your vote …so profound!

            Reply
            • Gezza

               /  1st May 2016

              Next thing you know the churches will be selling indulgences again to cash in on the indulging market.

            • @ Brown – Of course the other ‘moronic’ alternative is just for people and corporations to pay their tax, which could probably be reduced as a result, and we’d have a “boom” that wasn’t obscenely inequitable and confined to servility before the indulgent wealthy …

            • @ Gezza – It wouldn’t surprise me if a futures market in indulgences doesn’t start up? Good racket to get into on the ground floor maybe?

            • Alan Wilkinson

               /  1st May 2016

              Possum is right, PZ, you are hilarious. The notion that governments would voluntarily reduce tax is side-splitting.

            • Gezza

               /  1st May 2016

              Tena koe (hiya) Possum
              Ke te pehea a koe? (How ya goin’?)

            • @ Alan – “Governments” being entities entirely separate from people eh? Entities or ‘polities’ with inhuman wills of their own, that nothing can alter, including people being politically active, belonging to political parties and voting in elections. Now that’s funny!!! And the jokes on us!?

            • Gezza

               /  1st May 2016

              @ PZ just noticed that one about indulgences futures. Could be a good investment – there’s a helluva lot of sinners about these days. Want to set up a trust with me & we put some dosh into it? If it takes off we can cash in and spend the money on the poor in spirit. Brownie might kick in a few $ as well with a bit of luck & after some prayerful guidance.

            • Gezza

               /  1st May 2016

              I’ve got an uncle who’s a priest. We can probably pick up some indulgences at mates rates to start off with … have a think, might as well exploit the situation … don’t you think? Long as we have the right intentions … ?

        • Kitty Catkin

           /  1st May 2016

          That’s a question, not a comment, PZ.

          We may not need them, but extra income is always nice to have, and it’s unlikely that countries like the UK, Sweden and Switzerland are doing this from the goodness of their hearts so the income goes both ways.. As I understand it, the haven charges lower tax for the overseas companies, who want somewhere with a stable economy and known tax laws. It’s not something that I know much about except that it’s not the thinly disguised money laundering racket that it’s made out to be, although I am sure that the less scrupulous ones allow this to happen, and anyone who wanted that would be able to find somewhere that didn’t ask too many questions. But I would be extremely surprised if the UK and the others mentioned sanctioned this.Yes, I know that money laundering happens everywhere, but not with the Government and equivalent of IRD’s blessing.

          Reply
          • Blazer

             /  1st May 2016

            thanks for confirming that you know very little about tax havens,reputation and credibility KCK…stick to anecdotes about …cats!

            Reply
          • One point KCK. Blazer’s was a question within a longer ‘sentence’ (of the Blazer variety) in the broadly accepted form commonly known here as a “comment”.

            I agree, its always nice to have some extra income … even if, in the case of the super-wealthy and large corporations, it is above-and-beyond phenomonal profits, income and wealth you don’t need it at all … and regardless of whose money it actually is … unpaid wages, excess prices, shortchanged suppliers, ripped off third world resources … who cares …?

            Reply
      • Alan Wilkinson

         /  1st May 2016

        Given the unlikely chance that you actually pay tax, Blazer, I am sure you don’t need another. You already have one here.

        Reply
        • Gezza

           /  1st May 2016

          Can’t make up my mind which tick to give that one. Gone for an uptick in the end for humour.

          Reply
        • Blazer

           /  1st May 2016

          that is quite defamatory Al..I guess you were born priveleged and your station in life does not reflect any ability…your posts indicate you should be a minimum wage employee.

          Reply
          • Gezza

             /  1st May 2016

            Gave you one as well for same thing.

            Reply
          • Gezza

             /  1st May 2016

            When’s Shewan’s report due? Unless something spectacularly bad comes out of the Panama Papers all this argy bargy about New Zealand’s trust laws isn’t going to amount to a hill of beans until that review comes out and we see what it has to say.

            Reply
            • Blazer

               /  1st May 2016

              thats very charitable of you..turn a blind eye ..is govt policy..hey in a few years I’ll be gone..someone else can clean up the mess…Nat Party form…look at the last 40 years…its so funny they have persuaded the voters that they are sound economic mangers!Reality says…NO WAY !

            • Gezza

               /  1st May 2016

              … its so funny [the nats] have persuaded the voters that they are sound economic mangers … “

              Well, for all i know they could actually be pretty mangy at it … I have asked Alan whether we should be concerned about the level of borrowing they do a few days ago and if not why not, because I thought he’d be able to fill me in on that in a sentence or two, but I didn’t get a reply …

            • @ Gezza – I predict Shewan’s report will arrive about a month or two after we’ve all forgotten about the Panama papers thing completely, leading to another round of argy-bargy in the MSM, SM and blogosphere …

              I’ll prepare for it now …. What shall I say? Oh yeah … “Yeah, right”!!!

              There was an unfair tax regime in England back in legendary times, run by King John, which spawned a defiant tax rebel named Robin Hood. Who did they send to review that tax scheme?

              Why none other than The Sheriff of Nottingham.

            • Alan Wilkinson

               /  1st May 2016

              @Gezza, I was away for three days and didn’t see your question but I’ve commented before that the interest payments on our debt are only a few percent of GDP and a lot of money has gone into infrastructure both in Chch and elsewhere especially roading so it should be productive.

            • Comment of mine’s gone missing … Has it been censored?

              @ Gezza – “When’s Shewan’s report due?”

              About a month after we’ve all forgotten about the Panama Papers?

              I’ll practice a response to it now …. “Yeah, right!?”

              Back in England years ago King John instituted an unfair tax system. Spawned a band of merry men led by the outlaw Robin Hood. Who did they send to investigate this tax regime? Why, none other than The Sheriff of Nottingham.

              [No it wasn’t censored, it went into auto-moderation due to a trigger word and I wasn’t on hand to release it from moderation straight away. I sometimes do things other than continual monitoring of commnents, in this case having an early night. PG]

            • Gezza

               /  1st May 2016

              Thank you Alan, appreciate that.

          • Alan Wilkinson

             /  1st May 2016

            Not much privilege, Blazer. Just kind intelligent parents with a single income and not much money so we had to work hard.

            Maybe if you got taxed at 65% you would be looking for a tax haven. That can happen even here if you have overseas investments subject to double taxation.

            Do you think the majority of New Zealanders who pay no net tax should be insulted by that? Or just you for being presumed one of them?

            Reply
            • Gezza

               /  1st May 2016

              I didn’t realise we actually had double taxation situations. I thought we’d eliminated that with most countries by agreements ….

            • Blazer

               /  1st May 2016

              your selective amnesia is kicking in again Al…because you are on record on YourNZ as admitting you had a //priveleged upbringing’..so are you a liar or just…suffering from your Hero John Slys affliction….’brainfade?

            • Alan Wilkinson

               /  1st May 2016

              Nope, we don’t even have agreement with Australia.

            • Alan Wilkinson

               /  1st May 2016

              @Blazer, wrong. The only privilege was good people, not wealth. We had only what we earned and that was modest.

            • Gezza

               /  1st May 2016

              Here’s the IRD guts on it … haven’t had a proper look yet …
              http://www.ird.govt.nz/international/residency/dta/double-tax-agreements-index.html

            • Alan Wilkinson

               /  1st May 2016

              @Gezza, I was thinking of the imputation tax issue on investment shares, not income tax in both countries.

            • Blazer

               /  1st May 2016

              I am categorically stating that you admitted on YourNZ to having priveleged upbringing..period..your selective amnesia/dementia does not alter that..fact!

            • Alan Wilkinson

               /  1st May 2016

              I couldn’t care less what you state, Blazer. Link to my comment and let’s check out the facts then. And yet again, privilege can refer to other aspects of life than wealth – for example good parenting and education. That is almost certainly what I would have been referring to.

      • Iceberg

         /  1st May 2016

        A tax haven is a country with a lower tax rate. All countries are free to choose their own tax rates, because, you know, what’s that thing you keep bitching about? Sovereignty.

        Reply
  5. Alan Wilkinson

     /  1st May 2016

    This problem is even worse in this country and is far more serious than the tax haven b.s: http://www.investors.com/politics/editorials/election-season-reveals-rampant-economic-illiteracy-among-voters/

    Reply
    • Gezza

       /  1st May 2016

      Tell me about it, I’m trying to get my head around tax imputation credits …

      Reply
    • Alan Wilkinson

       /  1st May 2016

      If you own shares in an Australian company its profits are taxed before your dividends are paid and Australian shareholders get a tax credit for that. NZ shareholders don’t and the dividends are fully taxed again as income.

      Reply
      • Gezza

         /  1st May 2016

        Thanks again Alan I always appreciate your succinctness.

        Reply
  6. Test … one …. two … ???

    Reply
    • @ Gezza – I’m somehow locked out of this topic. Twenty attempts to comment and they won’t go through … F#&K!!!

      Regards indulgences. We don’t need ‘right’ intentions. This is business. The only ethic is to maximize profit. Must investigate cheap imported indulgences, perhaps from the Phillipines, which might be even cheaper than your uncle priest’s ones? Shares only in an indulgence for ‘ordinary’ investors, with whole indulgences only for VIP investor-stakeholder-partners? Probably have to factor in Papal kickbacks too. We need the Papal Seal on our Trust Business crest. Otherwise, aside from my lack of capital, we’re good to go. We’ll sell futures in indulgence futures to raise the start-up money?

      Also @ Gezza – “When’s Shewan’s report due?”

      I predict a couple of months after we’ve all forgotten about the Panama Papers. I’ll practice my response now …. “Yeah, right!”

      Imperfect analogy – King John had a tax regime back in England years ago. It spawned a band of Merry Men led by Robin Hood. Who did John appoint to review the system? Why, the Sheriff of Nottingham of course.

      [I won’t release all your attempts from moderation because they are much the same. But at 11 pm I was still in bed. PG]

      Reply
    • @ gezza – I’m somehow locked out of this topic. Twenty-one attempts to comment and they won’t go through … F#&K!!!

      Regards indulgences. We don’t need ‘right’ intentions. This is business. The only ethic is to maximize profit. Must investigate cheap imported indulgences, perhaps from the Phillipines, which might be even cheaper than your uncle priest’s ones? Shares in an indulgence for ‘ordinary’ investors, with whole indulgences only for VIP investor-stakeholder-partners? Probably have to factor in Papal kickbacks too. We need the Papal Seal on our Trust Business crest. Otherwise, aside from my lack of capital, we’re good to go. We’ll sell futures in indulgence futures to raise the start-up money?

      Also @ Gezza – “When’s Shewan’s report due?”

      I predict a couple of months after we’ve all forgotten about the Panama Papers. I’ll practice my response now …. “Yeah, right!”

      Imperfect analogy – King John had a tax regime back in England years ago. It spawned a band of Merry Men led by Robin Hood. Who did John appoint to review the system? Why, the Sheriff of course.

      Reply
      • Gezza

         /  1st May 2016

        Check and see if there was something wrong with your email address. I had that problem a couple of days ago PZ and I’d somehow managed to insert a couple of xtra letters in front of my email address so the posts went into the ether. They were probably sitting there awaiting clearance as a new email address with Pete so I got him to delete them and just re-posted.

        Reply
      • Gezza

         /  1st May 2016

        Otherwise, aside from my lack of capital, we’re good to go. We’ll sell futures in indulgence futures to raise the start-up money?
        I see your point – it’s getting tricky now. How do you feel about hiring Alan for some advice on the technical aspects? He can probably set it up in an afternoon. It’s probably gotta be either him or Blazer I reckon, and I’m not sure what Blazer would charge but It’d probably be thousands if he doesn’t believe we’re skint.

        I never liked that Nottingham sheriff prick. Hope he got his in the end. I think Robin lived to a ripe old age and they buried him where his last arrow landed so it must’ve turned out all right in the end.

        Reply
      • The only difference between 21 and the previous twenty is the word ‘Nothingham’ spelt correctly …

        Reply
        • Gezza

           /  1st May 2016

          I know you don’t trust Shewan, or maybe to put it more accurately you don’t trust anyone who works in the system to review it but he does have the expertise to do an independent review to establish the facts. The simple fact is, because of that PZ, I don’t think there will be any change to the current situation by the government because there’s not been established that there’s any real problem. If the Panama Papers turn up something embarrassing, then maybe that’ll change, but even then the logical thing any government would do is await the Shewan report.

          Reply
          • Forgive me saying this Gezza but “Yeah, right!” Like the Tax Working Group. Conclusion: The tax system is broken. Also: Tax shouldn’t be investigated separately from ‘Transfer’. Recommendations: variously as discussed here at YourNZ yesterday or the day before, and then some. Outcome: Sweet FA.

            Reply
            • Gezza

               /  1st May 2016

              I’m not prepared to pre-judge the outcome PZ.

            • Fair enough Gezza …
              A song for you and for Possum, taku hoa, and anyone else still listening … for the ones we love …

  7. Gezza

     /  1st May 2016

    Hmm same thing just happened to me PZ. Email address looks ok. Will try posting this.

    Reply
    • Gezza

       /  1st May 2016

      Nope, that looks to be working ok.

      Reply
      • Oh F%&K this is so bizarre … the word “Not ting ham” is somehow excluded from this site

        Comments with Not-ting-ham in them probably go direct to the GCSB or SIS or ‘Homeland Security’ and in an hour or two a drone appears over your house …? I mean …. FFS …

        Reply
        • Gezza

           /  1st May 2016

          Ah ok Dirmot or usual variation thereof is probably banned as well.

          Reply
          • patupaiarehe

             /  1st May 2016

            I suspect the reason might be something we are not supposed to talk about here. A precautionary block by our host perhaps……

            Reply
            • Gezza

               /  1st May 2016

              Yep, kei te pehea a koe (how are ya) pp?

          • Jesus, that’s one way of taking the wind out of a guy’s sales, eh? Lost in banned English place names or otherwise random excluded words are my gems about Sale of Future Indulgences Corporation Trust Inc – “You can trust us, God’s on our side” – and a beautiful, if somewhat flawed Robin Hood analogy … Damnation …

            Reply
            • Gezza

               /  1st May 2016

              Imagine being Pete though PZ. He’s gotta look through all those and go WTF?

            • Gezza

               /  1st May 2016

              Think I’d have given up after the first 6 … you’re pretty resilient mate.

            • patupaiarehe

               /  1st May 2016

              I’m pretty sure the list of banned english place names is pretty short PZ 😉 But don’t take my word for it…..
              GTG, cya next time 🙂

            • patupaiarehe

               /  1st May 2016

              Kiaora & Haere ra G, got work in a few hours…..

            • Gezza

               /  1st May 2016

              Gotta go too pp. Have a good one guys.

            • I’m finding this incredibly difficult to believe. Why would a harmless English place name get banned? Anyhow, pomarie you guys. Haere. Sleep well.

        • Gezza

           /  1st May 2016

          A name composed of (different spelling) those two words created issues for Pete I believe PZ. Posts using those names will be automatically filtered to moderation so he can ensure no potential legal probs, that would be my guess.

          Reply
          • @ Gezza & Patu – I have no f&%ken idea what you’re talking about? Someone’s name presumably? Someone named Not Ingham perhaps? What would the christian name ‘Not’ be short for? Nothan? Notalie? Anyway, a darned good comedy thread about indulgences has been lost and perhaps a great business idea too. I’d like to know who this bloody ‘Not’ person is?

            Reply
            • Gezza

               /  1st May 2016

              PZ, just take my word for it. Pete had problems involving a man whose name can’t appear here. His surname was spelled the way you mis-spelled the Sheriff’s hometown. He has put the name in to the system so that posts using that name get diverted automatically into moderation so he can check to see if someone’s posting that name to make trouble for him. He can explain it if he wants to tomorrow.

            • patupaiarehe

               /  1st May 2016

              Ask Pete. Here’s a goodnight tune for you….

            • Gezza

               /  1st May 2016

              Can’t beat the Gibson Les Paul. Love that axe. 😛 cya pp

            • Thanks Patu and Gezza. My apologies Pete. Filled your moderation inbox with about 20 near identical comments. Please disregard. No need to explain. I plead complete ignorance and a bad dose of stubborn tenacity. Cheers.

    • Isn’t that extraordinary … the word ‘Nottingham’ is somehow banned from this site …

      This is totally bizarre …. Where’s Zedd … mate … I need some ‘lid’ …

      [No it isn’t banned. Due to problems with some people planting comments to try and compromise the site the word ‘Nottingham’ was put on a watch list as I needed to avoid malicious actions. PG]

      Reply

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