Author: admin

For the first time in New Zealand, this article investigates the role that the New Zealand Bill of Rights Act 1990 has played in New Zealand taxation case law. To determine this, the article analyses the interaction of the New Zealand Commissioner of Inland Revenue’s powers of search and seizure under ss 16 and 17 of the Tax Administration Act 1994 and s 21 of the Bill of Rights Act 1990. The article demonstrates that the absence of constitutional rights in New Zealand, constitutional entrenchment and the inclusion of s 4 in the Bill of Rights Act 1990 have accounted for differing outcomes in the courts.

The accepted principle of the tax accounting rules for taxpayers’ assessable income inclusions is that a receipt or entitlement must have arisen or accrued before year-end in order to support an assessable inclusion for that year. In spite of this, for at least 45 years of Australia’s income tax, the tax accounting rule for beneficiaries of discretionary trusts has not been a year-end rule; it has been (at least) a two month post year-end rule. It is only recently that the rule has been ‘restored’ to a year-end rule. While no final decision has been made yet, it is clear that the current trust tax review strongly favours a post year-end rule for beneficiary derivation; in fact, there is little evaluation of a year-end rule. This article examines the merits of a year-end rule as opposed to a post year-end rule. Even though the discretionary trust is a problematic and unique ‘entity’, this article contends that the arguments for having a post year-end derivation date for taxation of a beneficiary of a discretionary trust are not convincing.

Included in the law introducing the first Commonwealth income tax in 1915 were provisions which conferred on the Commissioner of Taxation wide powers of investigation and to gather evidence. They were introduced at a time when Australia had no offshore investment and most foreign income was exempt. Despite the dramatic change in Australia’s economy over the last 100 years these fundamental powers have broadly remained the same. However, recent media coverage of the Commissioner’s successes in pursuing offshore tax evaders under the guise of Project Wickenby suggest there have been further developments that have converted these ‘lead bullets’ into gold. This paper explores whether that has occurred through ‘tax alchemy’ or through a quiet evolution. It does so by reviewing the development in the Commissioner’s offshore information gathering powers over the last 21 years and briefly examining the emergence of multilateral treaties that have the potential to enhance the effectiveness of those powers further.