Revenue Law

Hybrid entities give rise to international tax problems and opportunities. Different countries tax systems treat hybrid entities in fundamentally different ways, allocating income to different parties. The tax consequences of this divergence of approach result in complex and unintended outcomes. Referring to the OECD Report on the taxation of Partnerships, this article looks at whether the treatment of trans-Tasman limited Partnerships under the Australian and New Zealand Convention results in double taxation or double non-taxation. It concludes that hybrid entity double taxation is, mostly, resolved through the operation of the Convention.

As its title suggests, this article examines the fundamental, yet by no means basic question of what is a "tax"? The article focuses on recent judgments of the High Court which have, to some extent, eroded what many commentators have regarded as the classic definition of a tax expressed by Latham CJ in Matthews v Chicory Marketing Board.

This article provides an analysis of the Australian Taxation Office's ("ATO") second report on the taxation of electronic commerce, Tax and the Internet, in the context of international developments. It begins with an overvie of the basic principles that international consensus has determined will apply to taxation of electronic commerce and how they apply in Australia. A substantial part of

Over the years, the OECD has quietly taken centre stage in international tax policy development. The influence of the OECD is evident in the shape of Australian international tax policy. More recently, Australia has discovered that it can, in turn, have some influence in the direction taken by the OECD. This article examines some aspects of these influences. At a different level, the federal/state relationship is becoming tenser in the face of increasing tax competition. The second part of this article explores whether there are any lessons for federal tax systems that can be drawn from the way the OECD and similar organizations have helped the development of international tax policy. It is argued that an independent facilitator of tax policy, legislation and administration may prove beneficial.

This article considers the effectiveness of the application of a general anti-avoidance rule (GAAR) when the impugned transaction or arrangement is cross-border. The vital issue is how a double tax agreement applies to the transaction or arrangement when the tax authorities invoke the GAAR.

It is timely to examine whether the complaint handling procedures set up by the Australian Taxation Office measures up to the standards of best practice developed in alternative dispute resolution. This article analyses the relationship between taxpayers and the Australian Taxation Office in terms of conflict theory. If then extends this anlysis to focus on the latest complaint handling procedures developed for the Taxpayers' Charter.

Tax harmonisation between countries has been frequently advocated but progress has tended to be slow and uncertain. This article suggest that the degree of harmonisation sought has often been vague and that more progress might be made if it were generally agreed how far the progress should go. The paper examines the case for tax harmonisation and its meaning -concluding that tax harmonisation is consistent with fiscal regional diversity. In Europe the principle of "subsidiarity" has been invoked to attempt to resolve conflict between overall harmonisation while retaining diversity among Member States. The European experience with corporate tax harmonisation is analysed and compared with progress between Australia and New Zealand. It is concluded that technological change will increase the importance of tax harmonisation and greater progress might be made if the aims of tax harmonisation were clearer, specific and modest. In particular it might be advantageous if the degree of harmonisation sought were limited and seen to be consistent with regional variation in taxation.

Ten years ago the Revenue Law Journal was launched as a bold experiment by a new law school. The aim was for it to be a thoughtful and provocative academic journal. It was to provide a forum for insightful comment on the tax system and in depth analysis of topical issues. That it has succeeded is shown in its wide distribution to readers around the world. This article traces the development of the tax reform arguments over the last ten years through the editorial pages of the Journal.

This article reviews the experience of the UK with VAT over nearly three decades. There are several aspects that might be relevant to the way GST develops in Australia. One is that Australia might expect opposition to the new tax to diminish substantially as it becomes part of the fiscal furniture. Another is that GST might prove to have fewer disadvantages than some commentators have suggested and there might be pressure for an increase in GST in the future. A further aspect is that, with respect to legal issues, it might allow development of the purposive approach in tax matters.

This article looks at the effectiveness, in the New Zealand context, of the application of a general anti-avoidance rule (GAAR) when the impugned transaction or arrangement is cross-border. The important issue is how the provisions of a double tax agreement have application to the transaction or arrangement when the GAAR is invoked by the revenue authorities. In many countries, tax treaties prevail over domestic tax laws in the event of a conflict. Some countries provide expressly that their GAAR will apply to their treaties.The question is whether this is true for New Zealand, and whether there is anything peculiar in the New Zealand statutory scheme that gives guidance on whether tax treaties preclude or limit the application of the GAAR.

This article examines a particular type of dual-purpose expense-one which can be linked both to the derivation of assessable income and to the generation of a private benefit. On what basis should a taxpayer be able to claim a deduction for such an expense? Significant difficulty and uncertainty underlie the apportionment process that is applied to such an expense by the courts, the Administrative Appeals Tribunal and the Australian Taxation Office. The process provides little practical guidance to taxpayers on how to apportion dual-purpose expenses. In addition, a tension exists between the apportionment process and the threshold issue of characterisation or 'relevance' of dual-purpose expenses. This article examines these issues and suggests some clear principles that should be applied to the task of deducting dual-purpose expenses of this kind.

This article provides a comprehensive analysis of the application of e-commerce to GST. The first part identifies the general problems for GST that arise from the nature of e-commerce transactions in the context of national and international reports. The second part provides detailed analysis of the specific application of the GST law to e-commerce transactions through an extensive discussion of specific examples. The article concludes by highlighting the key issues affecting GST and the Internet.

This article examines the basic judicial principles used in interpreting s51(1) of the Income Tax Assessment Act 1936, the general deduction provision in the Act. It then looks at the application of those principles to the deductibility or otherwise of university fees.* Keywords income tax assessment, tax, university fees Cover

The deductibility of interest expense has been one of the most controversial issues in taxation law over the past decade, which raises the issue of modification. The purpose of this article is twofold. Firstly, to broadly analyse and compare the laws of a number of Anglo-American countries including Australia, Canada, New Zealand, the United Kingdom and the United States of America, which govern the deductibility of interest. Secondly, to review certain taxation policy arguments for either restricting or denying a deduction for interest in those Anglo-American countries. The study revealed that no coherent general principle of application in the area of the deductibility of interest was achievable in taxation law. Furthermore, a review of taxation policy in this area also revealed that interest incurred on borrowings of a private purpose represented the only restriction that should be placed on interest deductibility. Therefore, a general statutory approach may be the best solution to achieving this result.

We are all pleased to see a writer of skill on any Bench. To find such a writer in the taxation courts is a greater pleasure. BJ McCabe has recently joined the Administrative Appeals Tribunal and threatens to produce the sort of clarity, precision and liveliness brought to that Tribunal's tax decisions by Dr Paul Gerber.

This paper considers the outcome of recent inquiries into mass-marketed tax effective investment schemes in Australia within the broader context of promoting ecologically sustainable development in the agribusiness sector. The recent inquiries have revealed some significant shortcomings in the application of the selfassessment system to agribusiness investors, which have to some extent been remedied by the introduction of product rulings. Whilst product rulings have provided investors with a certain degree of security, there has been a significant decline in agribusiness investment and a convergence in the range of agribusiness ventures being offered. The author concludes that the income tax system is currently providing the wrong market signals, by promoting many agribusiness investment schemes that are not ecologically sustainable. Accordingly, there is a strong case for ecological tax reform, whereby the taxation treatment of agribusiness investment schemes needs to be better integrated with environmental policy.

The New Zealand Government proposed in August 2004 a 'radically' new approach to address evasion in industries which is perceived to be ingrained, namely targeted amnesties. With a general election and other 'more pressing' issues, the proposal has not been significantly advanced. This paper provides further guidance for implementing a modified targeted amnesty concept, including a proposal from the author to consider incorporating targeted amnesties within the existing Industry Partnerships program that the IRD has been developing since late 2001. Although the Government's proposal addresses concerns with evasion that is ingrained in some industry groups it makes no direct links between the targeted amnesties proposal with the IRD's Industry Partnership program. Clearly, to raise expectations that amnesties would only be targeted to industry partners would run counter to one of the core concepts for tax administration in New Zealand-the protection of the integrity of the tax system including taxpayer perceptions of that integrity.

Over the years, the OECD has quietly taken centre stage in international tax policy development. The influence of the OECD is evident in the shape of Australian international tax policy. More recently, Australia has discovered that it can, in turn, have some influence in the direction taken by the OECD. This article examines some aspects of these influences. At a different level, the federal/state relationship is becoming tenser in the face of increasing tax competition. The second part of this article explores whether there are any lessons for federal tax systems that can be drawn from the way the OECD and similar organizations have helped the development of international tax policy. It is argued that an independent facilitator of tax policy, legislation and administration may prove beneficial.