IRD to Investigate Offshore Incomes
The New Zealand Inland Revenue Department (IRD) will begin closer scrutiny of new zealanders with undeclared offshore assets and incomes, in an effort to stop tax evasion.
Last week the IRD released a statement disclosing its intention to utilize New Zealand’s existing Tax Information Exchange Agreements (TIEA) to catch potential tax evaders. Martin Scott, Group Manager of Assurance, revealed that the IRD is particularly interested in discovering New Zealand tax residents undisclosed offshore bank accounts, overseas life-insurance policies and superannuation benefits.
Under current New Zealand tax legislation, taxpayers are required to disclose all of their incomes, including those from foreign sources. According to Martin Scott, governments worldwide are becoming increasingly cooperative with New Zealand authorities in sharing tax and bank account information for the purpose of audits and criminal investigations. New Zealand is currently engaged in 15 separate bi-lateral TIEA agreements. Martin Scott added that in the future he expects even greater levels of availability of information on financial transactions involving New Zealanders.
Taxpayers who hold undisclosed offshore assets have been advised consult with a professional tax advisers regarding their situation. New Zealanders who are knowingly evading their tax obligations through the use of offshore assets are advised to consider making a voluntary information disclosure to the IRD. Currently, failure to reveal appropriate financial information can attract severe punishment, including a 150 percent shortfall penalties and criminal prosecution. Martin Scott warned tax evaders to make appropriate use of any time left before their assets are discovered in an IRD investigation.
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