Global Forum on Transparency and Exchange of Information for Tax Purposes peer reviews: Niue 2016 phase 2: implementation of the standard in practice ; March 2016 (reflecting the legal and regulatory framework as at December 2015)

104 Pages·2016·1.45 MB·English

by  OECD

Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
for Tax Purposes
OF INFORMATION FOR TAX PURPOSES
PEER REVIEWS, PHASE 2: NIUE
This report contains a “Phase 2: Implementation of the Standards in Practice” review, as well
as revised version of the “Phase 1: Legal and Regulatory Framework review” already released
Peer Review Report
for this country.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
Phase 2
multilateral framework within which work in the area of tax transparency and exchange of
information is carried out by over 130 jurisdictions which participate in the work of the
Global Forum on an equal footing. Implementation of the Standard
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the standards of transparency and exchange of information for tax purposes. These in Practice
standards are primarily refl ected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax
Convention on Income and on Capital and its commentary as updated in 2004, which has NIUE
been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant Pe
e
information for the administration or enforcement of the domestic tax laws of a requesting r R
party. “Fishing expeditions” are not authorised, but all foreseeably relevant information must ev
be provided, including bank information and information held by fi duciaries, regardless of the iew
existence of a domestic tax interest or the application of a dual criminality standard. R
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All members of the Global Forum, as well as jurisdictions identifi ed by the Global Forum as or
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 t P
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reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange as
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of information, while Phase 2 reviews look at the practical implementation of that framework. 2
Some Global Forum members are undergoing combined – Phase 1 plus Phase 2 – reviews. Im
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The ultimate goal is to help jurisdictions to effectively implement the international standards le
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of transparency and exchange of information for tax purposes. e
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All review reports are published once approved by the Global Forum and they thus represent tatio
agreed Global Forum reports. n
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For more information on the work of the Global Forum on Transparency and Exchange of f th
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Information for Tax Purposes, and for copies of the published review reports, please visit S
www.oecd.org/tax/transparency and www.eoi-tax.org. tan
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Consult this publication on line at http://dx.doi.org/10.1787/9789264250871-en. ctic
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This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and N
statistical databases. IU
Visit www.oecd-ilibrary.org for more information. E
ISBN 978-92-64-25086-4
23 2016 09 1 P

Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Niue 2016
PHASE 2:
IMPLEMENTATION OF THE STANDARD IN PRACTICE
March 2016
(reflecting the legal and regulatory framework
as at December 2015)
ThisworkispublishedontheresponsibilityoftheSecretary-GeneraloftheOECD.
Theopinionsexpressedandargumentsemployedhereindonotnecessarilyreflect
theofficialviewsoftheOECDorofthegovernmentsofitsmembercountriesor
thoseoftheGlobalForumonTransparencyandExchangeofInformationforTax
Purposes.
Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusof
orsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersand
boundariesandtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2016),GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeer
Reviews:Niue2016:Phase2:ImplementationoftheStandardinPractice,OECDPublishing.
http://dx.doi.org/10.1787/9789264250871-en
ISBN978-92-64-25086-4(print)
ISBN978-92-64-25087-1(PDF)
Series:GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeerReviews
ISSN2219-4681(print)
ISSN2219-469X(online)
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TABLE OF CONTENTS – 3
Table of Contents
About the Global Forum                                             5
Executive summary                                                  7
Introduction                                                       11
Information and methodology used for the peer review of Niue             11
Overview of Niue                                                 12
Recent developments                                               17
Compliance with the Standards                                       19
A. Availability of information                                        19
Overview                                                        19
A1 Ownership and identity information                               21
A2 Accounting records                                            46
A3 Banking information                                           52
B. Access to information                                             57
Overview                                                        57
B1 Competent Authority’s ability to obtain and provide information        58
B2 Notification requirements and rights and safeguards                  65
C. Exchanging information                                          67
Overview                                                        67
C1 Exchange-of-information mechanisms                             69
C2 Exchange-of-information mechanisms with all relevant partners        74
C3 Confidentiality                                                75
C4 Rights and safeguards of taxpayers and third parties                  78
C5 Timeliness of responses to requests for information                   80
PEER REVIEW REPORT – PHASE 2 – NIUE © OECD 2016
4 – TABLE OF CONTENTS
Summary of determinations and factors underlying recommendations      85
Annex 1: Jurisdiction’s response to the review report                    91
Annex 2: List of all exchange of information mechanisms                 95
Annex 3: List of all laws, regulations and other relevant material          99
PEER REVIEW REPORT – PHASE 2 – NIUE © OECD 2016
ABOUT THE GLOBAL FORUM – 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for
Tax Purposes is the multilateral framework within which work in the area
of tax transparency and exchange of information is carried out by over
130 jurisdictions, which participate in the Global Forum on an equal footing
The Global Forum is charged with in-depth monitoring and peer
review of the implementation of the international standards of transpar-
ency and exchange of information for tax purposes These standards are
primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the
OECD Model Tax Convention on Income and on Capital and its commen-
tary as updated in 2004 The standards have also been incorporated into
the UN Model Tax Convention
The standards provide for international exchange on request of fore-
seeably relevant information for the administration or enforcement of the
domestic tax laws of a requesting party Fishing expeditions are not authorised
but all foreseeably relevant information must be provided, including bank
information and information held by fiduciaries, regardless of the existence
of a domestic tax interest or the application of a dual criminality standard
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed This process is
undertaken in two phases Phase 1 reviews assess the quality of a jurisdic-
tion’s legal and regulatory framework for the exchange of information, while
Phase 2 reviews look at the practical implementation of that framework Some
Global Forum members are undergoing combined – Phase 1 and Phase 2 –
reviews The Global Forum has also put in place a process for supplementary
reports to follow-up on recommendations, as well as for the ongoing monitor-
ing of jurisdictions following the conclusion of a review The ultimate goal is
to help jurisdictions to effectively implement the international standards of
transparency and exchange of information for tax purposes
All review reports are published once approved by the Global Forum
and they thus represent agreed Global Forum reports
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the pub-
lished review reports, please refer to wwwoecdorg/tax/transparency and
wwweoi-taxorg
PEER REVIEW REPORT – PHASE 2 – NIUE © OECD 2016

ExECUTIVE SUMMARy – 7
Executive summary
1 This report summarises the legal and regulatory framework for
transparency and exchange of information in Niue as well as the practical
implementation of that framework The assessment of effectiveness in prac-
tice has been performed in relation to a three-year period (from 1 January
2012 to 31 December 2014)
2 Located in the South Pacific Ocean, Niue is a very small island State
with a population of approximately 1 600 inhabitants and a tiny economy
Formerly a New Zealand territory, in 1974 Niue chose to become self-
governing in free association with New Zealand Niue is responsible for its
external affairs and enters into treaties in its own right New Zealand has
accepted a responsibility to act for Niue in defence and foreign affairs mat-
ters if requested by Niue Geographic isolation, limited natural resources
and a small population hamper the development of an independent economy
Cyclones occasionally devastate the island’s infrastructure, including housing
and tourist facilities
3 In 1994, Niue introduced a series of measures designed to promote
the island as an offshore financial centre The offshore legislation was
repealed in 2006 and the Government of Niue closed all offshore operations
Niue does not appear to have any functioning international financial centre or
to have the capacity to establish such a centre in the immediate future Out of
the approximately 10 000 international business companies (IBCs) that were
registered in Niue at the time it had an active IBC registrar, only 10 applied
for re-registration after the registrar close-down Nine of those 10 companies
have now been struck off from the Companies Registry with the last three
being removed on 7 December 2015 The remaining company has complied
with its filing obligations with the Companies Registry Currently there are
less than 100 legal entities incorporated or carrying on a business in Niue
4 Niue has committed to the standards of transparency and effective
exchange of information This review found that Niue has the legal frame-
work for the availability of information in place, but certain aspects of the
legal implementation need improvement Ownership and identity informa-
tion is generally available for all relevant entities Identity and ownership
PEER REVIEW REPORT – PHASE 2 – NIUE © OECD 2016
8 – ExECUTIVE SUMMARy
information may not consistently be available in respect of all domestic trusts
and foreign trusts with Niuean trustees Enforcement provisions are in place
to enforce most requirements In practice, the Registrar of Companies had
adequate oversight of companies’ compliance with their filing obligations and
undertook enforcement action where required
5 Requirements to maintain accounting records in Niue generally
meet the international standard Niue’s Companies Act requires that reliable
accounting records are kept for all domestic companies Moreover, the Income
Tax Act requires accounting records and underlying documentation to be
maintained by taxpayers Niuean law does not ensure that reliable account-
ing records or underlying documentation are kept for (i) all trusts which are
administered in Niue or in respect of which a trustee is resident in Niue, and
(ii) limited liability partnerships and special partnerships in all circumstances
6 Niue had a taxpayer base of 750 taxpayers as at 12 November 2015,
including 522 individuals, and the remaining 228 being business taxpayers
(52 companies, 43 partnerships and 133 sole traders) Niue reports that due
to its small size and the small size of its private sector, the Taxation Office
works closely with businesses and companies to assist with compliance and
that audits are conducted on a regular basis A penalty amnesty concerning
the filing of tax returns was provided for all taxpayers until 2012 and no pen-
alties have been applied during the review period
7 In 2002 Niue closed its offshore bank registry During the first year
under review (year 2012), there was only one bank providing services in
Niue through a branch In 2013, the bank closed its Niuean operations Since
April 2013, a New Zealand based bank offers transactional banking services
in Niue through a Niuean agent, a government owned company The Niuean
authorities advised that since the bank operates directly from New Zealand
and it is subject to AML/CFT supervision in New Zealand with respect to its
Niuean transactions
8 In respect of access to information, Niue’s tax authority has broad
powers to obtain bank, ownership and accounting information and has meas-
ures to compel the production of such information for domestic tax purposes
These powers have been used during the review in relation to domestic
taxation matters The ability of Niue’s tax authority to use these powers for
exchange of information with other jurisdictions under a Tax Information
Exchange Agreement (TIEA) or Double Taxation Convention (DTC) is spe-
cifically provided in the Income Tax Act
9 While Niue’s authorities can also exchange some information pur-
suant to its Mutual Assistance in Criminal Matters Act 1998, this act only
provides for exchange of information in criminal (tax) matters on a discre-
tionary basis
PEER REVIEW REPORT – PHASE 2 – NIUE © OECD 2016