Panama Papers investigation: 'NZ absolutely, conclusively is a tax haven'

Andrea Vance
Source: 1News

Tens of thousands of Panama Papers documents reveal how New Zealand, Niue, The Cook Islands and Samoa have become prime destinations for the rich to hide their financial secrets.

The documents have been subject of an investigation by ONE News, in partnership with RNZ News and investigative journalist Nicky Hager.

Hager says: "What the Panama Papers show without any doubt at all, absolutely conclusively, is that New Zealand is functioning as a tax haven."

It can be revealed that at the centre of the New Zealand operation is Roger Thompson, a former Inland Revenue worker.

His accountancy firm - Bentleys, in the heart of Auckland's business district - is the New Zealand agent for Panama law firm Mossack Fonseca.

Mr Hager describes it as "an ordinary office in the middle of Queen Street where nobody would look and where it's only inside the computer files and the filing cabinet that you would realise that that is the centre of all kinds of tax haven activity in our country".

For $4000 this New Zealand agent creates trusts for wealthy foreigners who use New Zealand's limited disclosure rules to stay anonymous, even to tax authorities.

An admin fee of almost $3000 a year will see Bentleys send a one-page form to Inland Revenue. It confirms foreign trust clients don't need to pay any tax under New Zealand law.

Mr Hager says: "IRD never knows who the real people are who are behind these trusts. They never get to see the accounts. They never get to see what business they're doing."

Clients deliberately avoid linking their trusts with countries where New Zealand has deals to share information between tax departments.

Checks on clients are minimal - just a 15-page questionnaire, a scanned passport, proof of address, and an internet search.

Mr Hager says: "It's a completely unworkable system if you want to avoid corruption and crime and large scale tax dodging."

And Green party co-leader James Shaw says: "If it looks like one and it smells like one and it's being used as one then to all intents and purposes it is a tax haven."

Our investigations link NZ trusts to secret Central and South American deals involving middle men.

We discovered Bentleys clients include Israeli man Asaf Anzuri, who brokered a deal to sell drones to Mexico to spy on drug cartels.

We also uncovered a secret deal by Venezualan banker Carlos Dorado, buying Mexico's second largest drug company using a New Zealand trust and a Dutch company.

James Shaw adds: "The perception that we are being used as a tax haven is bad for New Zealand businesses because it raises the cost of doing business overseas for our businesses."

But Roger Thompson says New Zealand is not a tax haven. Instead it is a "high quality jurisdiction for trusts with a benign tax system in certain circumstances".

He insists that his services are used for legitimate purposes in compliance with the law, and that checks on clients are of a high standard.

Foreign trust rules here are now under review.

Hager says: "I think that the question for New Zealanders is not about tweaking the legislation, which is probably what the Government's very tame review will recommend. It's about whether we want to be a tax haven."

And that's just one of the questions John Key is likely to face in Parliament this week.

Reporting team: Andrea Vance, Gyles Beckford, Jane Patterson, Jessica Mutch, Lee Taylor, Nicky Hager and Patrick O’Meara

The investigation into the Panama Papers New Zealand is a journalistic collaboration by reporters from ONE News, RNZ News and investigative journalist Nicky Hager. It has been carried out with the assistance of the International Consortium of Investigative Journalists (ICIJ) and the German newspaper Süddeutshe Zeitung.