IRD targets offshore income

8th July 2010

INLAND Revenue is focusing attention on New Zealand residents with undeclared taxable offshore income.
Group Manager Assurance, Martin Scott, said that New Zealand tax residents are required to declare all of their incomes - this includes income from foreign sources such as offshore deposits, and income held in overseas structures that they control.
Mr Scott said Inland Revenue is particularly targeting the non-disclosure of offshore bank accounts, the use of foreign credit/debit cards, overseas life insurance policies and superannuation funds.
“We are using our network of tax treaties with other international tax authorities to support our audit activities, as well as actively participating in bilateral and multilateral compliance projects.
“We are receiving further and better information than ever before about international transactions involving New Zealand tax residents,” Mr Scott said.
Looking ahead, Mr Scott noted that the progressive negotiation of Tax Information Exchange Agreements (TIEAs) with offshore finance centres will enable Inland Revenue to obtain even more details of offshore accounts and assets of New Zealanders; 15 TIEAs have been finalised so far.
Failure to declare offshore income or to make appropriate disclosures to Inland Revenue can attract serious penalties, including shortfall penalties of up to 150 per cent, as well as prosecution action.