Category: Volume 15 Issue 1

This paper concerns the 2011 Australian Government’s then proposed changes to the transfer pricing rules, referred to as the stage one amendments, and the consultation process to provide interested parties with an opportunity to comment. The paper covers the external submissions received, with a focus on the dominant issues raised in the submissions regarding the planned changes to the transfer pricing rules. Also examined is the extent to which the issues advanced by the interested parties were included in the Bill that was tabled in parliament for debate, and finally enacted in September 2012 as Tax Laws Amendment (Cross-Border Transfer Pricing) Act (No. 1) 2012 (Cth). Using the methodology of grounded theory, we analyse 37 public submissions from the stage one consultations to ground a theory and explain the submitters’ issues of concern. The key concerns about the proposed amendments are: opposition to any retrospective powers; requests protection for taxpayers from penalties arising from a transfer pricing amendment; resistance to assigning ‘separate taxing powers’ to Australian tax treaties; and a clear aversion to any ‘discrimination’ against foreign related parties that are resident of a country that has a tax treaty with Australia. Transfer pricing literature is used to validate the results. While there were consistent patterns of concern in the submissions from the interested parties, the adoption of their requests was low in the stage one amendments.

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.