In recent times, we have seen several tax cases being lost by Taxpayers. Analysing the judgments, I believe we have seen a fundamental move when dealing with tax avoidance – a move back towards statutory interpretation. The Newton and Elmiger cases are the policy basis for our anti-avoidance rule as they focus on statutory interpretation and I believe the courts are showing a move back to this ordinary approach (as can be seen in the Banks cases).
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Submissions on the Governments proposals for the taxation of QCs and LAQCs closed at the beginning of this week. We can see no justification for repealing the qualifying company (QC) regime. The proposed reforms should be confined to loss-attributing qualifying companies (LAQCs).
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New Zealand’s company tax rate will be lower than Australia’s, after new Australian Prime Minister Julia Gillard today announced that the Australian corporate tax rate would not be cut below 29 percent.
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Most of the reaction to the Revenue Alert 10/01 from the tax community has been guarded. In general practitioners seem politely resigned to the uncertainty that the case entails and have grudgingly welcomed the Commissioner’s attempt to calm taxpayer fears on how he will apply the ruling in this case.
This blog considers the likely consequences if Gift Duty were to be abolished. The Government has recently announced that such a move is being considered. Every practitioner should be aware of this possible shift, as it is likely to have an impact on just about every individual they advise. The Government has said that a period of consultation will be undertaken, and if Gift Duty is to be abolished, the proposal will be contained in a Bill to be released in November 2010.
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The appeal in Penny and Hooper has been decided in favour of the Commissioner in a 2:1 majority decision of the Court of Appeal released on 4 June 2010.
In the first instance the decision could be considered to have been rendered largely nugatory for the time being given the recent reduction of the top marginal rate to that of the trustee rate. However, with the new company rate now significantly below these rates, the matter of below market salaries will likely be a live issue for some time.
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Received anonymously:
The Rewrite Advisory Panel (RAP) was established to advise rewriters of the Income Tax Act 1994. The Income Tax Act 2004 saw the RAP becoming the arbiter on possible unintended legislative changes and the Income Tax Act 2007 saw it becoming the overseer of the clarity of that Act (see: www.rewriteadvisory.govt.nz)
In 2009, a submitter raised with the RAP the definition of ‘revenue account property’ (the second RAP referred to in the title but, to avoid confusion, I do not use that acronym in this note). The submitter said:–
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What are the transitional rules for moving to the 15% GST rate in New Zealand from 1 October 2010 if you account for GST on a payments basis? The transition rules applying to those on a payments basis are arguably the most complex part of the change to the GST rate. This article helps explain these specific aspects of the transitional rules. Read more
John Peterson and Vicki Ammundsen join me on this first TalkTax podcast. Hope you enjoy our thoughts on the Budget released today. Please leave a comment below.
Click on this link to listen: Thoughts on the Budget
The transcript of the podcast is copied below:
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In this set of binding rulings the Inland Revenue addresses the foreign tax credit position for NZ resident investors in hybrid ALPs (i.e. Australian Limited Partnership (ALPs) that are subject to tax in Australia as companies but treated as pass-through for NZ tax purposes). The rulings conclude that a NZ resident investor will be entitled to a tax credit for Australian corporation tax paid by the ALP but not for any withholding tax on a distribution from the ALP.
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