NZ Super Accused of Tax Haven Abuse
September 27, 2013 New Zealand Taxation
The Green party is calling foul over New Zealand Super’s use of “tax havens”, but the Fund has hit back on the claims.
In a press release issued on September 26th the New Zealand Green Party claimed that the New Zealand Superannuation Fund has been “…caught using tax havens.”
The Green Party’s claims stem from the answers to parliamentary questions from the co-leader of the party, Russel Norman, to the Minister of Finance Bill English, in which the Minister cofirmed that approximately 7 percent of the investment made by the Fund are put into collective investment vehicles currently registered in low-tax jurisdictions, such as the Cayman Islands, the Isle of Mann, the British Virgin Islands, and Mauritious.
Russel Norman accused the government of upholding a double standard, saying “…we have a Government that is allowing the New Zealand Super Fund to use tax havens to avoid paying tax while simultaneously working to eliminate international tax avoidance through tax havens.”
Following the Green Party’s claims, the New Zealand Superannuation Fund released a separate press release, saying that the use of collective investment vehicles domiciled in tax-neutral jurisdictions was a legal and internationally accepted practice.
The Fund explained that no investments are made into entities which show evidence of utilizing unfair tax deductions or into entities which do not provide evidence of “…full tax transparency and information exchange for tax purposes, and compliance with all relevant law.”
The collective investment vehicles used by the Fund pay income taxes at the source of profits, and the use of entities registered in tax-neutral jurisdictions is to prevent an extra layer of taxation when an investment is made by an international party.
The Fund also confirmed that New Zealand income tax is paid on the earnings received from the collective investment vehicles, regardless of their location of domicile.
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