Date posted: 19/04/2021 2 min read

Submission on draft PUB00305

CA ANZ recently provided feedback to Inland Revenue on draft interpretation statement PUB 00305 - Tax avoidance and the interpretation of the general anti avoidance provisions.

The draft interpretation statement explains the Commissioner’s view of the law on tax avoidance in New Zealand.  Section BG 1 is the general anti-avoidance provision in the Income Tax Act 2007.  Section GA 1 enables the Commissioner to make adjustments as a result of the application of section BG 1.  The draft statement is also relevant to the general anti-avoidance provision in the Goods and Services Tax Act 1985 (section 76).  The interpretation statement is accompanied by an information sheet.

When finalised, the Interpretation Statement will replace the current statement IS 13/01:Tax avoidance and the interpretation of sections BG 1 and GA 1 of the Income Tax Act 2007.

CA ANZ understands the need to review and update Inland Revenue’s current statement on tax avoidance. In our view, readability for a wider audience would be improved if an Executive Summary was included in the draft statement.  Taxpayers and tax agents’ utility would be further enhanced if the draft statement was supplemented with appropriate QWBAs setting out an indicative view of scenarios where tax avoidance may or may not be present.

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