24 Feb 2014

Warning tax deal may affect everyone

9:10 pm on 24 February 2014

A tax expert says an agreement reached by finance ministers from the world's richest countries could affect everyone - not just multinational companies.

At the G20 meeting in Sydney at the weekend, the ministers agreed to work towards implementing a single global standard to enable automatic information sharing about international taxpayers.

It follows widespread debate about multinational companies not paying tax in countries where they are generating income.

New Zealand already has double tax agreements with many countries, which allow a country to ask for information on specific taxpayers.

But Mike Rudd, the tax director at accountancy firm Staples Rodway, says under this proposal, the release of information would be automatic.

"Once those systems are in place then each country, I expect, would then need to sign individual agreements with other countries on the basis on which they'll be automatically sharing that information.

"That's another hurdle that'll be interesting to see how they approach it. I think it'd be a real concern if everyone just signs up to it and says we'll give everybody everything. There's massive privacy concerns and sovereignty issues if they do that."