The left-wing, the opposition and the Media party are all claiming that NZ has become a tax haven as a result of the revelations in the so-called Panama Papers.
So is NZ a tax haven?
Well, the short answer is no.
The slightly longer answer is not even close.
Fortunately the OECD has written a Policy Paper on tax havens, a document the Media party clearly haven’t read, much less understood.
2.1 Definitions of Tax Havens
Given the importance of the issue and the international commitments in this area, it might be expected that identifying tax havens would be straightforward, but this is not the case. There is no agreed definition of what the term “tax haven” actually means. Probably the best known definition of a tax haven is that used by the OECD (1998).
Four key indicators of tax havens are identified:
- No or only nominal taxes (and offering, or being perceived as offering, a place for non-residents to escape tax in their country of residence);
- Lack of transparency (such as the absence of beneficial ownership information and bank secrecy);
- Unwillingness to exchange information with the tax administrations of OECD member countries; and
- Absence of a requirement that activity be substantial (transactions may be “booked” in the country with no or little real economic activity).
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