New tax law demands banks share customer info

Banks will have to share customer information after a new tax law took effect Saturday, according to New Zealand Bankers’ Association.

The new law requires banks and other financial institutions to identify accounts held by foreign tax residents.

This customer information will be provided to Inland Revenue, which will in turn share the same information with other countries’ tax agencies that are party to the information sharing agreement.

According to NZBA, the tax information sharing scheme would be reciprocal which means other countries are similarly expected to report on New Zealand tax residents in their jurisdictions to Inland Revenue.

“The policy behind this legal requirement is designed to combat tax evasion around the world. The banking industry supports that goal,” NZBA chief executive, Karen Scott-Howman said.

“It means that banks may ask existing customers to confirm if they are tax residents in countries other than New Zealand. It also means that banks will ask new customers after 1 July to self-certify their country or countries of tax residence.”

Under the law, customers identified as foreign tax residents need to provide banks their date of birth and foreign taxpayer identification number.

The automatic exchange of information (AEOI) will adhere to Common Reporting Standard (CRS) to share information among participating countries.

In line with this, the information must be reported on the 30th of June every year to Inland Revenue, which will share information with 58 other jurisdictions.

The first exchange of information will be in 2018.