2 - Legislating No direct impact than Increased administration Increased. Offshore It is potentially arguable Addresses the Meets the objective in part. to require those identified as part of the costs for Inland Revenue. persons need to that imposing a requirement problem As discussed above, will evidence of a broader suite of property tax The existing forms establish a New Zealand on offshore persons that definition in part provide more complete New Zealand measures introduced as part would need to be altered bank account that meets does not apply to residents because it will information on individuals bank account as of Budget 2015. to reflect the legislative the statutory requirements is discriminatory. increase a prerequisite to requirement. The and provide evidence of However, the bill information that control entity/trust an offshore primary legislation will that account to Inland introducing these changes potentially structures, but this person need to be amended. Revenue. has been subject to the available to information deficit seems obtaining an standard Bill of Rights Inland Revenue – likely to be filled in the IRD number. The requirement for a These costs are not vetting process that applies particularly for near future in any event person to provide a bank expected to be significant, to all legislation and no non-individuals. account to the but will require an offshore issues have been raised. However, it will when AML Phase 2 takes Commissioner in the person to at least either go However, Inland Revenue increase effect event that they become through the standard AML has looked at international compliance and an person” will checks with a New precedent and is not aware administration “offshore require a separate Zealand institution or find of any comparable costs and will process to be established a foreign agent of a New jurisdiction that requires likely only be of to process and record Zealand bank in order to evidence of a domestic temporary these disclosures. have the relevant AML bank account as a benefit in checks performed. prerequisite to obtaining a practice. . tax identification number.
2 - Legislating to require evidence of a New Zealand bank account as a prerequisite to an offshore person obtaining an IRD number. Meets the objective in part. As discussed above, will provide more complete information on individuals that control entity/trust structures, but this information deficit seems likely to be filled in the near future in any event when AML Phase 2 takes effect No direct impact than those identified as part of the broader suite of property tax measures introduced as part of Budget 2015. Increased administration costs for Inland Revenue. The existing forms would need to be altered to reflect the legislative requirement. The primary legislation will need to be amended. The requirement for a person to provide a bank account to the Commissioner in the event that they become an “offshore person” will require a separate process to be established to process and record these disclosures. Increased. Offshore persons need to establish a New Zealand bank account that meets the statutory requirements and provide evidence of that account to Inland Revenue. These costs are not expected to be significant, but will require an offshore person to at least either go through the standard AML checks with a New Zealand institution or find a foreign agent of a New Zealand bank in order to have the relevant AML checks performed. . It is potentially arguable that imposing a requirement on offshore persons that does not apply to residents is discriminatory. However, the bill introducing these changes has been subject to the standard Bill of Rights vetting process that applies to all legislation and no issues have been raised. However, Inland Revenue has looked at international precedent and is not aware of any comparable jurisdiction that requires evidence of a domestic bank account as a prerequisite to obtaining a tax identification number. Addresses the problem definition in part because it will increase information potentially available to Inland Revenue – particularly for non-individuals. However, it will increase compliance and administration costs and will likely only be of temporary benefit in practice.