They seem to be missing a word in the headline

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The NZ Herald has joined in with the Media party pile on regarding the Panama Papers.

Hamish Fletcher has joined the other idiot journalists clutching at straws. and decided to call NZ a tax haven and talk about tax evasion schemes.

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.

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”.

[…]   

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.

Elliffe said it was hard for a foreign government investigating the affairs of one of its citizens to find out about a New Zealand trust unless they knew one existed and what it was called.

“We don’t know or, more importantly, foreign revenue authorities have no way of effectively exchanging information with New Zealand revenue authorities in a meaningful way which will expose whether this [the use of a New Zealand-based trust] is blatant tax avoidance or clever tax planning,” he said.

Nice of the NZ Herald to talk about tax evasion and tax avoidance.

That’s why I think they left a word out from their headline because one of the biggest cases current before the courts with IRD is the tax avoidance schemes of APN the owner of the NZ Herald:

The Herald has been running a series on multinationals, and the low level of tax they pay in NZ.

But there is one multinational they have ignored.

That is APN, which by coincidence owns the NZ Herald.

The Herald keeps looking at tax paid in relation to revenue, so we should do the same for APN. What are the stats?

Revenue – 2014 $843.1 m, 2015 $850.0 m
Tax paid – 2014 $9.2m, 2015 $19.8m
Tax as a percentage of revenue – 2014 1.1%, 2015 2.3%
But that isn’t the real shocker. Here’s the real hypocrisy.

The 20 companies being targeted by the Herald have all paid the amount of tax they are legally bound to pay. APN HAS NOT.

Look at their annual report:

The Company is involved in a dispute with the New Zealand Inland Revenue Department (IRD) regarding certain financing transactions. The dispute involves tax of NZ$64 million for the period up to 31 December 2014. The IRD is seeking to impose penalties of between 10% and 50% of the tax in dispute in addition to the tax claimed. The Company has tax losses available to offset any amount of tax payable to the extent of NZ$48 million.

On 22 February 2013, the Adjudication Unit of the IRD advised that it agrees with the position taken by the IRD. Accordingly, the Company was issued with Notices of Assessment denying deductions in relation to interest claimed on certain financing transactions. In response to this step, the Company has commenced litigation in the High Court of New Zealand to defend its position in relation to this matter.

APN, the owners of the Herald, are tax dodgers. The IRD has pinged them for $64 million of tax, and penalties of up to 50% (which they generally only do if they think it is in bad faith). And APN are fighting this in court.

How on earth does the Herald have the gall to lecture other companies on the amount of tax they pay, when their own parent company has been found by the IRD Adjudication Unit to have illegally dodged $64 million of tax.

The Herald has been involved in other tax avoidance schemes, including dodging paying around $137.5 million in GST.

So while they sanctimonious deride other companies and people, who incidentally they provide no evidence of wrong doing, there is ample evidence of their own dodgy tax affairs.

This is why the media is broken in this country. They are outrageous hypocrites.

 

– NZ Herald

 


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  • R&BAvenger


    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” – Deborah Russell, left wing blogger and failed Labour Party candidate – should be inserted as well.

    In addition tax avoidance is not illegal.

    http://www.investopedia.com/terms/t/tax_avoidance.asp

    “Tax avoidance is the use of legal methods to modify an individual’s financial situation in order to lower the amount of income tax owed. This is generally accomplished by claiming the permissible deductions and credits. This practice differs from tax evasion, which is illegal. ”

    Unlike tax evasion, which is.

    http://www.investopedia.com/terms/t/taxevasion.asp

    “Tax evasion is an illegal practice where a person, organization or corporation intentionally avoids paying his/her/its true tax liability. Those caught evading taxes are generally subject to criminal charges and substantial penalties.”
    So the journalists, trained and skilled, NZ’s most well know ‘investigative journalist and an ‘award winning journalist cannot sue Google to locate definition of theses terms and incorporate them in their articles?
    The WOBH staff and commenters have more investigative capability than the sorry mob of 7 that are pushing this nonsense.

  • earthyundertones

    The only real “expert” claiming we are complicit is Deborah Russell… the ex Labour candidate for Rangitikei! This is a ludicrous joke. We are a pimple in these documents and yet the opposition (media and political parties) are crying as if we have been shamed to the world. Pathetic!

    • Boondecker

      Some people feel the need to be big fish in a little pond. This is just the sort of thing we should expect others, like Tamati Coffey would be putting his oar in, if it actually meant anything to him or he understood any of it, of course.

      The fact is this woman is an academic (PhD that teaches uni accounting practice at massey) and again we all know how they operate, i.e. Jane Kelsey. However, same as with Kelsey, she has an educated but thoroughly biased opinion against the incumbent government and nothing will make her see the positives, until the Left regain power. As such, asking her to offer up soundbytes purporting to support the crescendo of negativity the msm is building up around trusts and tax havens is an easy-in for any journo.

      • Keeping Stock

        The big issue here is the non-disclosure by the Herald of Ms Russell’s Labour Party affiliation, and their attempt to pass her off as a neutral academic.

        She may well be very good in her field, but readers are entitled to know that she views the world through red-tinted lenses.

        • earthyundertones

          Yes, totally agree. This should be disclosed upfront.

        • Greenjacket

          Keeping Stock – you seem to be labouring under the delusion that media journalists have ethics.
          That Deborah Russell’s obvious partisanship has not been declared by the NZ Herald or TVNZ is, sadly, not a surprise.

    • Wayne Hodge

      One of the real problems is the way TVNZ and their fellow travellers present Ms Russell as an independent, yet clearly she is not and has an axe to grind. And grind she does!

  • axeman

    My question is when will someone have a crack at The NZ Herald, TVNZ, MediaWorks etc and really stick it at them, and sue their miserable backsides for demfaming good people and business’s. I am so over these self righteous bunch of scribes.
    The sooner MediaWorks goes broke and the whinging journalists lose their jobs and realise that perhaps Weldon wasn’t the bad guy after all the better. The sooner a real news agency is about that just reports the news on fact the better.
    The sooner John Key can get on Story and Seven Sharp and destroy this pathetic circus the better.
    I’ll start to listen to the so called experts when they have made it in the real world outside the protection of academia and institutions, and can table a better statement of position than Key or teach for free because they have amassed enough wealth that they don’t need the payment from the Uni

  • Rebecca

    What a terrible example from Craig Elliffe.

    Apart from standard Panamanian corporate tax, Panama also levies specific withholding taxes on foreign distributions unless you can demonstrate taxation in the country of residence. Which you cannot if you use a NZ Foreign Trust that pays no tax on its Panamanian income. Well done exchanging home tax for Panamanian tax.

    Next: without knowing what South American nation, nobody can comment on the difficulty of repatriating your profits and whether you’d be taxed again at that point.

    Finally, if the home country can’t tax you on income in a foreign trust- then they can change their rules, as NZ did over the Cook Islands.

    It’s anecdote, but IMHO it’s more likely that the South American family wants its money somewhere safe abroad in case of a junta or other instability. To invent an example like this and declare it’s proof of a tax haven, just insults everybody.

    • Wayne Hodge

      I agree, but surely nobody would disbelieve a professor at Auckland Uni!

      • Rebecca

        Actually I found quite a good working paper by Auckland law school professor Michael Littlewood. Very clear. “Michael Littlewood tax haven” will find it on your favorite search engine.

  • hookerphil

    Am amazed, just looked at the Guardian and the Daily Telegraph and didn’t see New Zealand in any shape or form, not even in a sporting content.
    Perhaps should have looked under obituaries to see if the Herald was in there.

  • Eiselmann

    Hamish Fletcher seems to be suggesting that his employer (as an example) should not be able to claim expenses against their gross earnings and thus reduce their tax liabilitiy , I’m sure the owners and shareholders of the Herald would be interested in his radical views as they show him the exit door.

    Would anyone invest in a company he runs?

  • SAM51

    Surprise surprise – the business reporter buries this in the Herald – to me this is way more important than the other nonsense will ever be!

    “Govt posts surprise budget surplus in first 9 months”

  • David Moore

    Rather reminiscent of The Guardian stashing hundreds of millions of untaxed profits in the Cayman Islands

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