The Inland Revenue’s attempt to gain access to companies’ offshore information has been met with concern from online accounting software provider Xero.

Government guidelines are underway with cloud computing providers to gather company records from data centers outside New Zealand to help in their fight against tax evasion.

Xero, who doubled revenue last year, currently store customer information in the United States based data centers while other Kiwi businesses using cloud-based accounting systems also have records abroad.

While the Wellington based company, founded in 2006, assisted the IRD in their proposals, they remain closely tied with the Privacy Commissioner to ensure government powers are not abused and customers are aware of any privacy invasions.

"We don't think it's fair that government departments should be able to go on fishing expeditions (for information)," said Rod Drury, Xero’s chief executive. "We also believe that if one of our customers gets a request for data the customer should be alerted that the request is taking place so they have the opportunity to injunct that."

In response the IRD claimed the guidelines would mean companies would no longer need permission to store data offshore as appropriate access would be available.

"These guidelines do not alter our ability to gather taxpayer information under the existing powers and processes," an IRD spokeswoman said.

The government say no changes will be made until the Taxation Bill is passed in Parliament.

What do you think? Are government plans a breach of customer privacy? Let us know your comments below.