Evading paying tax has just become significantly more difficult, Revenue Minister Peter Dunne said today in announcing that New Zealand has signed the multilateral Convention on Mutual Administrative Assistance in Tax Matters.
Mr Dunne said that signing the Convention was another important step for New Zealand in the fight against tax evasion.
"International co-operation in tax matters is critical to ensuring that everyone pays their fair share of tax," Mr Dunne said, also citing the Government's decision last week to pursue a FATCA (Foreign Account Tax Compliance Act) agreement with the United States.
"New Zealand already has a wide network of bilateral tax treaties, including 38 double tax agreements as of yesterday's signing with Papua New Guinea.
"These are part of a growing network of tax information exchange agreements," he said.
"Signing the Convention has significantly increased New Zealand's international tax treaty network at a single stroke", he said.
The convention will help with the detection and prevention of tax evasion by allowing Inland Revenue to request information from other tax authorities. It will also enable Inland Revenue to seek assistance in collecting outstanding tax debts from absconding taxpayers who move overseas.
The total number of countries signed up to the Convention has reached 42, and 10 additional countries have formally signalled their intention to sign.
The convention, formulated jointly by the OECD and the Council of Europe, was amended in 2010 to improve the standard of co-operation between signatory countries, and to open the convention to countries other than OECD or Council of Europe members.
"Being a signatory to this convention is one more nail in the coffin for tax evasion," Mr Dunne said.