Monday, November 11, 2013

Foreign companies scoff at the law

One of the basic principles of the rule of law is that it applies to everyone. But apparently, foreign owned companies are systematically ignoring it:

In April Fairfax asked the Companies Office for the names of overseas-owned companies which had failed to file their accounts as required, something the The Companies Office would not provide the details, but admitted there were about 1100 which had not filed financial statements for the 2011 or 2012 tax years.

That prompted the crackdown on the large number of foreign-owned companies ignoring the law.

Reminders were sent to over 1700 overseas-owned New Zealand companies with March 2013 balance dates, of which just under half have responded.

The Companies Office said. "800 of these companies complied within the required time period of 5 months and 20 working days after the balance date. Overdue reminders were issued to the 900 non-compliant entities on October 15, 2013."

But the Companies Office expects over half of the overdue companies would file their accounts and the remainder would be "subject to further compliance action".

So basicly a quarter of foreign-owned companies are going to ignore the law. Why do they do this? Because the Companies Office never prosecutes. And then they wonder why compliance is low...

The law allows a penalty of up to a $100,000 fine for failing to file financial statements. It needs to be enforced. And if the present leadership of the Companies Office won't do it, then its time to sack them and get people who will.