28 February 2014
Convention on tax assistance coming into force
The multilateral Convention on Mutual Administrative Assistance in Tax Matters will become effective for New Zealand from tomorrow, Revenue Minister Todd McClay says.
The Convention, which New Zealand ratified in November, will greatly enhance our ability to eradicate tax evasion and avoidance.
“International tax evasion and avoidance are one of the biggest threats to our tax system today,” Mr McClay says.
“It is important that taxpayers operating internationally pay their fair share of tax in the jurisdictions they are operating in. This issue cannot be resolved by any single country acting alone, it needs a global solution.”
“The only way to achieve a fair outcome in each country is for countries to collectively agree to share information.”
International cooperation in tax matters is increasing in momentum, with the G20 singling out base erosion and profit shifting (BEPS) and the automatic exchange of information as key issues to be progressed in 2014.
“Both the OECD and G20 are working on the technical details of measures governments can take to tackle BEPS, and on a new global standard for the reporting and automatic exchange of financial account information.”
“The multilateral Convention will supplement these measures, providing us with an additional weapon in the anti-avoidance arsenal.”
“By allowing Inland Revenue to request information from other tax authorities and seek assistance in collecting outstanding debts from tax dodgers who move overseas, this Convention strengthens our ability to prevent avoidance and evasion.”
“We are also fine-tuning our domestic rules to limit the opportunity for evasion and avoidance here in New Zealand.”
“Preventing tax evasion and avoidance is all about fairness. Fairness to the vast majority of New Zealanders who responsibly meet their tax obligations.”
“The net is closing on tax evaders,” Mr McClay says.
Media contact: Hayden Cox 04 817 6991, 021 917339