Published on 01 Jul 04
by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE
Tax commissioners' interpretation statements or policy statements that try to clarify obscure areas of law are generally to be welcomed for the certainty that they offer to taxpayers. However, it can be a mistake to issue such statements to clarify areas where rules can never be framed as true bright line tests.
This article examines three statements about such areas of law, one being a draft. The statements attempt, respectively, to clarify the distinction between form and substance, to illustrate the operation of general anti-avoidance rules, and to define what amounts to a sham. The author's thesis is that in such areas, which Parliament has left vague, at best taxpayers seize the opportunity to plan their way around commissioners' interpretation statements and at worst taxpayers may actively exploit them.
John is Professor and former Dean of Law at Victoria University, Wellington. Henry Lang Fellow, Institute of Policy Studies, Wellington.
Current at 7 May 2004