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A Part IVA that goes the other way? The rule against double taxation


“Loopholes” for avoiding tax have traditionally been recognised as flaws in our income tax legislation. Less recognised is the fact that the ever-increasing complexity of Australia’s tax legislation also creates “reverse loopholes”, that is, unintended instances of double taxation. The existence of Part IVA greatly discourages taxpayers from exploiting loopholes, but there is no comprehensive rule stopping the revenue from benefiting from double taxation. This also contrasts with the international tax system, which has as a key principle the reduction of double taxation.

This paper describes the existing, piecemeal approaches to domestic double taxation taken by the legislation and the Courts, and advocates for a more comprehensive and simple legislative rule preventing double taxation.

Author profile

Chloe Burnett ATI
Chloe Burnett is a Barrister at the New South Wales Bar, specialising in tax controversy. She has appeared in a number of high profile tax cases including Chevron, the Part IVA cases News Australia Holdings, British American Tobacco and Citigroup and the buy-back cases Consolidated Media and Cable & Wireless. She is currently advising in relation to a number of BEPS audits. Chloe has been an Adjunct Lecturer at the Sydney University Law School since 2006. - Current at 04 November 2016
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