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In running your business, your business’ bank, lawyer or accountant may have asked you to provide your self-certification. However, the process for completing a self-certification form may seem confusing or unnecessary. This article will:

  • outline what self-certifications are;
  • why you may be required to provide your self-certification; and
  • how you go about completing a self-certification form. 

What Are Self-Certifications?

A self-certification is information about your business’ tax residency status. Your business’ bank, lawyer or accountant may request to collect your self-certification when you:

  • open a bank account for your business; 
  • first establish a business relationship with this bank, lawyer or accountant; or
  • seek to conduct an occasional transaction through this bank, lawyer or accountant. 

Why Do You Need to Provide Self-Certifications?

New Zealand, along with many other countries, has committed to reducing global tax evasions. Tax evasion occurs when an individual or business deliberately avoids paying their taxes. Likewise, two critical international agreements have been created and entered into by New Zealand to achieve this goal. These agreements are the:

  • Common Reporting Standard (CRS); and
  • Foreign Account Tax Compliance Act, or FATCA. 

Additionally, the purpose of these agreements is to ensure the automatic exchange of account information between the New Zealand Inland Revenue Department and tax authorities of other participating countries.

Common Reporting Standard

The Organisation for Economic Co-operation and Development (OECD) created the Common Reporting Standard to combat global tax evasion. The CRS requires certain New Zealand financial institutions, or banks, to collect their customer’s self-certification. If their customers are tax residents of a country other than New Zealand, banks must legally pass these self-certifications to the Inland Revenue Department (IRD). Further, the IRD may pass these certifications on to overseas tax authorities to determine whether any tax evasion has occurred by that customer. 

Foreign Account Tax Compliance Act 

The United States enacted the Foreign Account Tax Compliance Act to reduce tax evasion by citizens and the United States’ tax residents. Similar to the CRS, the FATCA requires certain New Zealand financial institutions and banks to collect their customer’s self-certification. If the customer is a US person or entity, New Zealand banks may be legally obliged to pass on those self-certifications to the IRD. Following this, the IRD may then pass these certifications to the United States’ Internal Revenue Service. 

New Zealand law also requires other entities, such as law firms, accounting practices and real estate agents, to request self-certifications from their clients and provide this information to the Inland Revenue Department. Even if your business does not have any offshore accounts or links to an American entity, you may still be requested to provide a self-certification to ensure compliance with:

  • the CRS;
  • the FATCA; or
  • domestic law.  

How Do You Complete a Self Certification Form?

If your bank, lawyer or accountant requests a self-certification from your business, you will likely have to complete a self-certification form. You will either be provided with the form for completion by the person requiring it. Alternatively, you can access a form on the New Zealand Bankers’ Association website

The self-certification form has five sections, and each section has different requirements to be completed.

1. Entity Account Holder Details

The first section of the form concerns the account holder’s personal information. The account holder is the person listed as holding an account with your bank. Your business structure may be in the form of a trust or a partnership. In that case, the account holder will be the trust or partnership itself, rather than the trust’s beneficiaries or the partners in the partnership. 

This account holder will have to provide their: 

  • full legal name;
  • registered office address or place of work;
  • IRD number;
  • country of establishment; and
  • registration number. 

2. Entity Account Holder Type 

The account holder will also have to specify the type of entity that they fall into. There is a wide range of entities specified on the form, including a:

  • non-financial entity that is a corporation;
  • government entity; or
  • financial institution. 

The self-certification form contains a glossary that details each entity’s meaning to help you specify what category your business falls under.

3. Entity Account Holder Tax Residence(s)

The third section asks whether you are a tax resident in a country other than New Zealand. If this is the case for your business, you will need to specify what country or countries you are a tax resident of, and your tax identification number in these countries. 

4. Controlling Person(s)

Depending on your business or account holder’s entity type, you may also have to specify information about your controlling persons. You will have to detail each controlling person’s full legal name and the relationship that the individual has with your entity.

5. Declaration and Consent

The final section requires you to provide your name, signature and the date on which you signed it, to affirm that the form is accurate and complete.  

Key Takeaways

To assist New Zealand’s efforts in combating global tax evasion, you may need to provide your self-certification to your business’s bank, lawyer or accountant. A self-certification is information, usually expressed as a form, concerning your business’s tax residency status. If your business has an offshore account or is linked to an American entity, this self-certification may pass to the IRD for review. If you need more information about self-certifications, contact LegalVision’s corporate lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions

What are self-certifications?

A self-certification is information about your business’ tax residency status.

Why do you need to provide self-certifications?

Your business may be required to provide a self-certification form to your bank, lawyer or accountant to assist in New Zealand’s commitment to combat global tax evasion.

What is the CRS or the Common Reporting Standard?

The Common Reporting Standard is an international agreement developed by the Organisation for Economic Co-operation and Development (OECD) to combat global tax evasion.

What is the FATCA or the Foreign Account Tax Compliance Act? 

The United States enacted the Foreign Account Tax Compliance Act to reduce tax evasion by citizens and tax residents of the United States.

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