scholarly journals Predication: The Test For Tax Avoidance in New Zealand From Newton to Ben Nevis

2015 ◽  
Vol 46 (3) ◽  
pp. 1011 ◽  
Author(s):  
John Prebble ◽  
Hamish McIntosh
Keyword(s):  
New Zealand ◽  
Income Tax ◽  
Tax Avoidance ◽  
Decision Makers ◽  
Tax Legislation ◽  
First Case ◽  
The Supreme Court ◽  
Inland Revenue ◽  
To Come ◽  
Historical Antecedents

General anti-avoidance rules in income tax legislation are a blunt instrument. They can operate most effectively when decision makers move directly from the rule, such as "Arrangements with the purpose of tax avoidance are void against the Commissioner" to the facts, for example, "Objectively, do these facts demonstrate a purpose of avoidance?", or to paraphrase Lord Denning's test, "Viewing these facts objectively, can one predicate an avoidance purpose?"New Zealand courts adopted Lord Denning's "predication test" in 1966, but later cases confused things by trying to incorporate sub-rules into the exercise of looking for an avoidance purpose.Parliament codified and strengthened the predication test in 1974. Inland Revenue Department archives show that strengthening and codification of the test was what was intended and the language of the amendment confirms this intention. Nevertheless, later judgments misunderstood what the predication test entailed, and mistakenly thought that Parliament intended the 1974 amendment to abolish the test and to replace it with something else.In 2009 the Supreme Court delivered its judgment in Ben Nevis Forestry Ventures Ltd v Commissioner of Inland Revenue, the first case on tax avoidance to come before the Court. The Court said that the 1974 amendment abolished the predication test, but its reasoning in deciding the Ben Nevis case was in effect an exercise in predication.It would be useful to employ a name for the Supreme Court's approach to tax avoidance because a name would enable people to refer to the Supreme Court's test without circumlocution. "Predication" is the appropriate name because of its accuracy as to the meaning required and because of its historical antecedents.

The Privy Council and New Zealand

1997 ◽  
Vol 46 (4) ◽  
pp. 908-918 ◽  
Author(s):  
Megan Richardson
Keyword(s):  
New Zealand ◽  
Supreme Court ◽  
Social Conditions ◽  
Privy Council ◽  
Solicitor General ◽  
First Case ◽  
The Supreme Court ◽  
Ambivalent Attitude

Historically, New Zealand has indicated an ambivalent attitude to the Privy Council. The appeal has existed for New Zealand since the Supreme Court was established in 1841 and the first case on appeal was heard in 1849. But, as early as 1903, the Bench and Bar protested against the judgment of the Privy Council in Wallis v. Solicitor-General as showing ignorance of New Zealand law and social conditions.

scholarly journals The Nordic model: 25 years of drawing the line between earned and capital income in Finland

2018 ◽  
Vol 2018 (1) ◽  
pp. 64-80
Author(s):  
Reijo Knuutinen
Keyword(s):  
Tax Policy ◽  
Income Tax ◽  
Tax Avoidance ◽  
Personal Income ◽  
Income Taxation ◽  
Court Cases ◽  
Capital Income ◽  
Earned Income ◽  
Tax Legislation ◽  
Personal Income Taxation

Abstract In personal income taxation, Finland had used the dualistic income tax model, known as the Nordic model, since 1993. The basic idea is that taxation of earned income is progressive, whereas taxation of capital income is proportional. Here, the model is reviewed from different perspectives: What kind of tax policy background does it have and how is the distinction between types of income argued for on theoretical grounds? How has the borderline of earned and capital income been drawn in tax legislation, and how is it drawn in the court cases, in particular in those related to tax avoidance? The dualistic model has often been criticized using equity arguments, but there are still strong arguments for the model. In any case, the model has not always worked too well in practice. The distinction has required special tax legislation as well as given rise to many court cases.

scholarly journals Some preliminary evidence on employee share ownership schemes in New Zealand listed companies

1970 ◽  
Vol 12 (1) ◽  
Author(s):  
Michael Firth ◽  
Stephen Keef ◽  
Ross Mear
Keyword(s):  
New Zealand ◽  
Income Tax ◽  
Listed Companies ◽  
Preliminary Evidence ◽  
Participation Rates ◽  
Share Ownership ◽  
Inland Revenue

This note examines employee share ownership schemes as approved by the Commissioner of the Inland Revenue Departnzenr under the provistons of section 166 of the 1976 Income Tax Act. The note provides preliminary evidence on the characteristics of these section 166 schemes, including an analysis of the participation rates and the benefits conferred.

scholarly journals Tax avoidance in New Zealand: in search of principles

2021 ◽  
Author(s):  
◽  
Harriet Bush
Keyword(s):  
Income Tax ◽  
Legal Reasoning ◽  
Tax Avoidance ◽  
Case Law ◽  
Moral Principle ◽  
Judicial Decision ◽  
Judicial Decision Making ◽  
Moral Principles ◽  
Inland Revenue

<p>This paper analyses the judicial application of New Zealand’s general anti-tax avoidance rule contained in s BG 1 of the Income Tax Act 2007 in the light of three 20th Century jurisprudential theories of legal reasoning. It focuses specifically on the role of moral principles in the process of judicial decision-making and explores whether existing case law on the avoidance provision can be seen as supporting the hypothesis that judges apply moral principles when reaching decisions. Following the test laid down for tax avoidance in the Supreme Court’s decision in Ben Nevis Ventures Ltd & Others v Commissioner of Inland Revenue, the paper concludes that judges have the ability, in some cases, to reach their decision about whether there has been tax avoidance by applying the moral principle that tax should apply uniformly to all cases that are economically similar.</p>

scholarly journals Tax avoidance in New Zealand: in search of principles

2021 ◽  
Author(s):  
◽  
Harriet Bush
Keyword(s):  
Income Tax ◽  
Legal Reasoning ◽  
Tax Avoidance ◽  
Case Law ◽  
Moral Principle ◽  
Judicial Decision ◽  
Judicial Decision Making ◽  
Moral Principles ◽  
Inland Revenue

<p>This paper analyses the judicial application of New Zealand’s general anti-tax avoidance rule contained in s BG 1 of the Income Tax Act 2007 in the light of three 20th Century jurisprudential theories of legal reasoning. It focuses specifically on the role of moral principles in the process of judicial decision-making and explores whether existing case law on the avoidance provision can be seen as supporting the hypothesis that judges apply moral principles when reaching decisions. Following the test laid down for tax avoidance in the Supreme Court’s decision in Ben Nevis Ventures Ltd & Others v Commissioner of Inland Revenue, the paper concludes that judges have the ability, in some cases, to reach their decision about whether there has been tax avoidance by applying the moral principle that tax should apply uniformly to all cases that are economically similar.</p>

scholarly journals Simplicity in Legislative Drafting and Rewriting Tax Legislation

2012 ◽  
Vol 43 (3) ◽  
pp. 517 ◽  
Author(s):  
Ivor Richardson
Keyword(s):  
United Kingdom ◽  
New Zealand ◽  
Income Tax ◽  
Common Law ◽  
Tax System ◽  
Tax Legislation ◽  
The United Kingdom ◽  
Law Commission

The search for simplicity in legislative drafting affects all legislatures. It is also central to the work of the New Zealand Law Commission and of governments in other comparable jurisdictions. Rather than exploring a range of statutes in various jurisdictions, this article focuses on income tax. It does so for two reasons. The first is that income tax has been crucial to the funding of government in common law jurisdictions and to achieving a legislative balance between simplicity and other criteria of an acceptable tax system. The second is that we can draw on three recent projects to rewrite income tax legislation – in Australia, the United Kingdom and New Zealand.

TAX ON WITHDRAWED CAPITAL IN THE CONDITIONS OF CHANGES IN TAX LEGISLATION: ACCOUNTING ASPECT

2018 ◽  
Author(s):  
Iryna Нushlenko ◽  
Keyword(s):  
Income Tax ◽  
Production Capacity ◽  
Tax Avoidance ◽  
Business Environment ◽  
Business Owners ◽  
Tax Rates ◽  
Capital Taxation ◽  
Tax Legislation ◽  
Accounting Model ◽  
Withholding Tax

The expediency of introducing changes to the tax legislation on the introduction of withholding tax instead of the classic corporate income tax is substantiated and an alternative on the transformation of income tax into withholding tax is proposed to create favorable investment conditions for business development. It is necessary to introduce an alternative accounting model of business capital taxation, where there is a clarification of the object of income taxation, specification of transactions and tax rates and the introduction of subaccounts for the accounting of such tax. The need to adopt changes to the legislation, which should become a catalyst for the development of business in Ukraine and the economy as a whole, is outlined. The relevance of the introduction of a tax on withdrawn capital as an element of protection against tax avoidance schemes and incentives for business owners to expand production capacity to stimulate the development of the business environment across the country.

New Zealand Court of Appeal: Judgment in Controller and Auditor–General V. Sir Ronald Dawson

1997 ◽  
Vol 36 (3) ◽  
pp. 721-743
Author(s):  
Michael Bvers
Keyword(s):  
New Zealand ◽  
Judicial Review ◽  
House Of Representatives ◽  
Income Tax ◽  
Cook Islands ◽  
Tax Haven ◽  
Inland Revenue ◽  
Auditor General ◽  
Court Of Appeal

On February 16, 1996 the New Zealand Court of Appeal rendered judgment on three applications for judicial review arising out of what had come to be known in New Zealand as the “Winebox Inquiry”. The Inquiry began as the result of certain documents being tabled (in a winebox) before the New Zealand House of Representatives. It was alleged that the documents implicated several New Zealand companies in the evasion of New Zealand income tax by the use of the Cook Islands as a tax haven, and that the New Zealand Inland Revenue Department and Serious Fraud Office had been incompetent at the least in failing to detect and prevent the abuse.

scholarly journals The Interpretation Provisions in the New Zealand Income Tax Act 1994

1999 ◽  
Vol 30 (1) ◽  
pp. 49
Author(s):  
John Prebble
Keyword(s):  
New Zealand ◽  
Income Tax ◽  
General Applicability ◽  
The Core ◽  
Tax Legislation ◽  
The Way

Historically, courts have been unwilling to adopt a purposive approach to the interpretation of tax statutes. This reluctance extends to the application of section 5(j) of the Acts Interpretation Act 1924, which courts say has no general applicability to income tax legislation. In 1996, as part of a process of rewriting the Income Tax Act 1994, Parliament inserted a number of interpretation provisions into the Act. The goal that the drafters had in mind is not entirely clear, but the 1996interpretation provisions appear to be calculated to require the courts to interpret the Act more purposively, meaning, in this context, to interpret the Act more in the light of the overall objective of levying tax. If that was indeed the goal, the 1996 provisions do not achieve it, nor is it possible to determine whether the provisions achieve other worthwhile goals. Indeed, the stipulation in section AA 3(1) that provisions of the Act should be interpreted "in [the] light of the purpose provisions, the core provisions, and the way in which the Act is organised" may in future be turned against the interests of the Crown in order to support otherwise unpersuasive arguments on behalf of taxpayers.

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