Robertson Grant: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeRobertson Grant: Oral Questions — Questions to Ministers[Sitting date: 06 April 2016. Volume:712;Page:10232. Text is incorporated into the Bound Volume.]3.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Finance: Did he read the report “Taxation of Multinationals” prepared by the Treasury and the Inland Revenue Department dated 15 August 2013 and did he undertake the action sought from him to agree to the recommendations contained in that paper?Hon BILL ENGLISH (Minister of Finance): Yes and all recommendations in the paper were agreed to.Grant Robertson: What action did he take on being advised by officials in that paper that “To protect our international reputation it may be necessary to strengthen our regulatory framework for disclosure and record-keeping.”?Hon BILL ENGLISH: The paper outlined a whole range of measures that could be taken with regard to the taxation of multinational companies. The action that we took relevant to that particular proposal was that a whole lot of other measures in the paper were important because they protected the New Zealand tax base which we regard as our top priority. The Mexican tax base is interesting but it is not our top priority. So we left the measures around those trusts because as the paper points out it would require time effort and compliance from the Inland Revenue Department with no benefit to the New Zealand tax base.Grant Robertson: Is he saying by that answer that he does not put any value whatsoever on New Zealand’s reputation and would rather get alongside the mega-rich than protect that?Hon BILL ENGLISH: No New Zealand’s reputation for tax policy as confirmed by the OECD when it did its report is that we have probably the most comprehensive broad based - low rate tax system in the world—that is no other developed country has a tax base with as few holes as New Zealand has. That report was about the taxation of multinationals in New Zealand. A large number of the recommendations have been implemented and we decided that the Opposition’s view about New Zealand as a tax haven is pretty irrelevant.Grant Robertson: Is it correct that New Zealand is the only OECD country that allows tax avoidance through trusts in this way?Hon BILL ENGLISH: I do not know about the rules for trusts in every other OECD country but that is not what the OECD said. What it said was that we comply. As for the member’s assertion that somehow having trusts endorses tax avoidance—well so does having companies so does having sole proprietors and so does having PAYE; the tax vehicle is not determinant of whether there is avoidance. Of course it is the way that people use them that matters and our top priority is how New Zealanders use our tax vehicles; not how Mexicans use them.Grant Robertson: How is it possible that our foreign trust disclosure rules do not need to be tightened when companies like Turner Hopkins advertise themselves by saying that New Zealand is increasingly popular with foreign trusts because “There are very limited disclosure obligations”?Hon BILL ENGLISH: Whoever they are they are wrong. The combination of the disclosure requirements and the information requirements around trusts the application of anti - money-laundering procedures the new introduction of the automatic exchange of information which is coming and the Foreign Account Tax Compliance Act regime mean that any foreign investor with a presence in New Zealand could be subject to anything from one to four compliance regimes. So I suggest that the tax advisers update their understanding of New Zealand law.