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Part IVA: Murky waters

Published on 01 Sep 13 by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE

The much-anticipated amendments to the general anti-avoidance provisions of Pt IVA of the Income Tax Assessment Act 1936 (Cth) were finally enacted into law by the Tax Laws Amendment (Countering Tax Avoidance and Multinational Profit Shifting) Act 2013 (Cth), which received the royal assent on 29 June 2013.
This article considers the new-look Pt IVA, and identifies a number of difficulties with the underlying assumptions on which the changes appear to have been based. The article examines in turn the tax benefit element, the concept of “deletion” or “annihilation” of schemes to which the legislation applies, the notion of “reconstruction” of arrangements, and the purpose test which is seen as the central element that distinguishes between tax avoidance and legitimate tax planning.

The article concludes with a discussion of the likely approach by the courts to interpretation of the new laws.

Author profile:

John Cavanough
John is Barrister and Solicitor - The Supreme Court of Victoria.
Current at 1 October 2014
Click here to expand/collapse more articles by John Cavanough.
 
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