Aggressive Taxation and Invasion of Privacy

In some cases, onshore jurisdictions can offer much of the tax benefit of offshore trusts. The privacy of the trust is also a consideration. The New Zealand foreign trust takes advantage of what was originally an anti-avoidance provision: it and exempts trusts with foreign settlors and under some treaties is treated as New Zealand resident, but an Act of 2017 requires registration of full information, initially and annually, and this information may be exchanged with other tax authorities. Ireland treats a settlement made by a non-resident settlor with professional trustees as non-resident for capital gains tax. The Czech trust is treated as a corporate body, taxable at 19%; it is about to be relieved of tax on dividends, but will require registration on a register partially available to public authorities.
The fourth AML Directive requires the enactment of legislation providing for registration of corporate entities and trusts, but limiting access to trust information. It is currently proposed that access be limited to persons with a legitimate interest, but the European Parliament would like to go further. There have been some ECJ decisions indicating that full disclosure infringes the right to private life, and similar views have been expressed by the French Constitutional Court, and Germany, the Czech Republic, Ireland, Liechtenstein and Singapore are variously reacting to this conflict between law enforcement and privacy. In the United States, the US “foreign trust” offers tax advantages, and private trusts will not be governed by the CDD rules for US financial intermediaries.