The New Zealand tax system is so structured as to allow the country to be used as a tax haven. Specifically, it allows non-residents to use trusts established in New Zealand to avoid the tax they would otherwise have to pay in their home country. This article explains how this works, and asks whether New Zealand law should be changed so as to prevent tax avoidance of this kind or, at least, to make it easier for other governments to prevent it.

"Tax policy changes in 1987/88, including international taxation, and the trust law. The setting up by State-owned corporations of subsidiaries in tax haven jurisdictions. Legal problems caused by the use of tax haven companies, especially after corporate collapses, such as in the Equiticorp case. Use of tax haven shell companies by Brierley Investments Ltd, especially in Australia, and a legal case involving IEL Ltd. The key Winebox cases from 1987/88, including the BNZ captive insurance scheme. Analysis of particular debt defeasance using European Pacific and Fay Richwhite companies in the Cook Islands"--Publisher information.

This second edition of the authoritative text by James Coleman discusses New Zealand jurisprudence on the general anti-avoidance provision. It enables practitioners to comply with the provision with increased confidence and predict with greater certainty when it applies. The book includes detailed coverage of the Supreme Court judgment in Ben Nevis and subsequent decisions by that Court on the application of the general anti-avoidance provision. Tax Avoidance Law in New Zealand deals with the tests for what constitutes tax avoidance in the light of that judgment. It also deals with the interrelationship between the specific provisions of the Income Tax Act and the general anti-avoidance provision, the relationship between the general anti-avoidance provision and specific anti-avoidance provisions, and the concept of sham.

The New Zealand tax system was until recently so structured as to allow foreigners to use the country as a tax haven. Specifically, it allowed them to use trusts established in New Zealand (referred to as “foreign trusts”) to avoid and evade the tax they would otherwise have had to pay in their home country. It would seem to have been possible, too, for foreigners to use such trusts for other illicit purposes, in particular money-laundering and financing terrorism. In April 2016 the publicity given to the Panama Papers attracted attention to this aspect of the New Zealand tax system. The government responded by appointing a distinguished accountant, John Shewan, to advise. He recommended that the law be changed and the government accepted his recommendations. This paper explains how the foreign trust rules work, and how the amending legislation was designed to preclude this form of abuse.

This thesis examines the domestic politics of tax competition in New Zealand and the implications for international tax governance. International tax avoidance and evasion are detrimental to state and global welfare, and their distributive effects create significant political instability. The persistence of tax havens and absence of an effective tax regime warrants further exploration. Existing academic contributions are dominated by economic and legal scholarship. These largely assume tax havens benefit from tax competition, using rationalistic explanations at the state-state level. This thesis examines the economic and distributive effects of tax competition within New Zealand, alongside the operation of competition norms and private actors that constrain both domestic policy and multilateral cooperation. Tax havens exercise considerable agency in international taxation, despite their small economic and military size. Therefore, the effectiveness of an international tax regime depends not only on the commitment of resources from great powers, but on voluntary compliance from tax havens. New Zealand is chosen as a case study. This is because following New Zealand’s implication in the Panama Papers in 2016, its role as a tax-haven remained under-analysed. This research draws on quantitative and qualitative sources, including economic data from the OECD, attitudinal data from International Social Survey Programme, and consultation documents from the Tax Review 2001 and the Government Inquiry into Foreign Trust Disclosure Rules 2016. The economic data suggests that New Zealand, especially in terms of productivity and economic growth, has not benefitted from competitive taxation. In some instances, tax competition actually exacerbated inequalities. Despite this, the 2001 review under the fifth Labour government shows the operation of competitiveness norms can be internalised by an ostensibly left-wing government and elevate the power of private actors. The 2016 Inquiry after the Panama Papers also saw a dominance of financial interests, although a shift away from competitiveness to privacy norms. However, the fifth National government has since committed to reform, demonstrating it is possible with changing norms and organisational dynamics, in a post-Global Financial Crisis era.

This book sails in uncharted waters. It takes a human rights-based approach to tax havens, and is a detailed analysis of structures and the laws that generate and support these. It makes plain the unscrupulous or merely indifferent ways in which, using tax havens, businesses and individuals systematically undermine and for all practical purposes eliminate access to remedies under international human rights law. It exposes as abusive of human rights a complex structural web of trusts, companies, partnerships, foundations, nominees and fiduciaries; secrecy, immunity and smoke screens. It also lays bare the cynical manipulation by tax havens of traditional legal forms and conventions, and the creation of entities so bizarre and chimeric that they defy classification. Yet from the perspective of the tax havens themselves, these are entirely legitimate; the product of duly enacted domestic laws. This book is not a work of investigative journalism in the style of the Pulitzer Prize-winning authors of The Panama Papers, exposing political or financial corruption, money laundering or the financing of terrorism. All those elements are present of course, but the focus is on international human rights and how tax havens do not merely facilitate but actively connive at their breach. The tax havens are compromising the international human rights legal continuum.