Robertson Grant: Oral Questions — Questions to MinistersText is incorporated into the Bound VolumeRobertson Grant: Oral Questions — Questions to Ministers[Sitting date: 03 May 2016. Volume:713;Page:10661. Text is incorporated into the Bound Volume.]7.GRANT ROBERTSON (Labour—Wellington Central) to the Minister of Revenue: Why was the review of foreign trusts proposed by IRD in 2014 not undertaken?Hon MICHAEL WOODHOUSE (Minister of Revenue): The view at the time was that this would have required the Inland Revenue Department (IRD) to dedicate significant resources to an area that did not affect New Zealand’s revenue base and that other issues on the tax work programme were deemed more important by both IRD officials and the then Minister. At the time the Government made it clear that a future review was possible if it appeared that New Zealand’s regulatory settings may facilitate inappropriate behaviour in other jurisdictions and that is what the Shewan review is.Grant Robertson: Is it correct that in its 15 August 2013 paper accepted by the Minister of Revenue and the Minister of Finance IRD identified a review of foreign trusts as one of a series of initiatives that should be “a key focus” in the tax policy work programme?Hon MICHAEL WOODHOUSE: There was a reference in that 2013 document to a review of the tax treatment of foreign trusts at about paragraph 22 after a very very long list of the other work that was considered high priority by IRD. It also said that the decision to proceed with any proposals for reform relating to base erosion and profit shifting needs to be evaluated more generally in the context of all of the Government’s priorities on the tax policy work programme. That is what the Government did.Grant Robertson: Further to that answer is it correct that in a report dated 14 November 2014 and entitled Timeline for BEPS-related tax policy workIRD lists under the heading “Action Plan Items” “Review taxation of foreign trusts” with a date of December 2014 for that?Hon MICHAEL WOODHOUSE: Yes it did and it also included things like strengthening the non-resident withholding tax rules which would have positively affected the New Zealand tax base and GST on online purchases which would have positively affected the tax base and it proceeded with those things because that was good for the New Zealand taxpayer. The other is not and could have been negative.Grant Robertson: When the Minister told foreign trust industry representatives in January 2015 that the Government had no plans for a review of foreign trusts why did he not tell them that it was actually already on the IRD work programme?Hon MICHAEL WOODHOUSE: The IRD work programme had a massive list of things that it was doing. The question of the review of foreign trusts was a footnote amongst the significant Business Transformation project loss grouping resident withholding tax non-resident withholding tax the brightline test PAYE deductions the business tax green paper and many many others. Those are the things that were proceeded with.Grant Robertson: I seek leave of the House to table Appendix A of the IRD report dated 14 November 2014 Time line for BEPS-related tax policy work which includes a list of 1 2 3—Mr SPEAKER: Order! [Interruption] Order! The document has been well described. I will put the leave. Leave is sought to table that particular IRD time line dated 14 November 2014. Is there any objection? There is none.Document by leave laid on the Table of the House.Grant Robertson: Is it not true that IRD had in fact already started a review of foreign trusts because it considered it a key focus but only after the Prime Minister directed his close confidante to the Minister who shut down the review? That is actually what happened is it not?Hon MICHAEL WOODHOUSE: In respect of the second part of that question absolutely not.