Source: Australian Tax Forum Journal Article
Published Date: 1 Sep 2018
Both Australia and New Zealand (NZ) have enacted general anti-avoidance rules (GAARs) for income tax and goods and services tax (GST) and the Commissioner may, if he/she believes the GAAR has been breached, issue a determination to negate the benefit the avoider or another taxpayer obtains from the transaction.
The Commissioner in Australia may, if he believes it is fair and reasonable to do so, make a compensating adjustment in favour of a party adversely affected by a GAAR determination to ensure income tax or GST is not levied twice on the same income or transaction. In NZ, the Commissioner is directed to ensure there is no double taxation for income tax purposes. With GST the legislation is silent.
It is the differences in approach between Australia and NZ that is the subject matter of this article. The authors conclude that the Australian regime although not free of difficulties does not present the same problems as does the NZ regime. In Australia the Commissioner must consider making a compensating adjustment and in exercising his discretion, may not use this discretion to impose a penalty on the disadvantaged taxpayer. In NZ, even though the legislation imposes an obligation of the Commissioner to make a compensating adjustment to avoid double taxation, it seems the courts have been reluctant to enforce this obligation. The authors suggest that even though the NZ GST legislation is silent on this point, the obligations of the Commissioner are the same as for income tax. In reaching these conclusions the authors consider the many problems arising in both countries with the right of taxpayers not to be double taxed after GAAR.
Taxpayer rights in Australia? Hope springs eternal - Journal 01 Oct 2019
Tax system integrity and directors' obligations under the Corporations Act - A tale of two systems - Journal 01 Jul 2019
A critical evaluation of how aspects of the tax system in Australia are administered and their impact on corporations and directors - Journal 01 Jul 2017
GST/VAT general anti'avoidance approaches: some preliminary findings from a comparative study of Australia and South Africa - Journal 01 Jul 2017
The role of the criminal law for serious non compliance - Journal 01 Jul 2013
Ranking of Tax Journals - The Way Forward - Journal 01 Oct 2009
Is there a perception of revenue bias on the part of the ATO in private binding rulings on large, complex issues? - Journal 01 Sep 2008
Sorry, this is subscriber only content.
To gain access to this material and much more - Subscribe Now.
(Note: Members can access Taxation in Australia journal articles without a Tax Knowledge Exchange subscription - please log in to access).
Already a Subscriber? Login now
The material is copyright. Apart any fair dealing for the purpose of private study, research criticism or review, as permitted under the copyright Act, no part may be reproduced by any process without written permission from The Tax Institute.
Unless expressly stated, opinions are not that of The Tax Institute, which accepts no responsibility for the accuracy of any of the information contained within it.
The Tax Institute
(ABN 45 008 392 372 (PRV14016))
The Tax Institute is a Recognised Tax Agent Association (RTAA) under the Tax Agent Services Regulations 2009.
All materials provided on this site are protected by copyright and are owned by or licensed to TTI.
Except as expressly permitted by TTI or the copyright owner, any person or company who uses this site must not use, reproduce, redistribute, retransmit, publish or otherwise transfer, or commercially exploit, the materials or any information, software or other content, in whole or in part, which is available through this site.