Published on 01 Sep 14
by "TAXATION IN AUSTRALIA" JOURNAL ARTICLE
In New Zealand, the reach of the general anti-avoidance rule (GAAR) has increased in recent years, driven not by legislative amendments but by changes in Inland Revenue practice and judicial attitudes. This has seen the New Zealand Inland Revenue achieve a remarkable run of successes in GAAR cases before the courts. In a recently released draft statement, Inland Revenue has considered the potential application of the GAAR to four relatively simple intra-group arrangements. In this article, the authors summarise the four fact scenarios considered in the statement and examine the basis on which Inland Revenue concludes that the GAAR would or would not apply (as the case may be) in each scenario. The four scenarios represent relatively commonplace intra-group arrangements. This means that an understanding of Inland Revenue’s approach will be relevant to an assessment of tax risk for many New Zealand businesses.