Inland Revenue

Fred Ward and Young-chan Jung of Russell McVeagh explain the newly adopted approach to New Zealand's GAAR that was shaped by a Supreme Court decision.

The GAAR provides that a tax avoidance arrangement is void as against the Commissioner and that the Commissioner may counteract a tax advantage obtained from or under a tax avoidance arrangement. Of relevance to the updated Interpretation Statement is the Supreme Court's decision in Frucor delivered in September 2022. The Interpretation Statement is not technically binding on the Commissioner; however, from a practical perspective, it is of use to taxpayers as a risk analysis tool because it provides an updated statement as to the Commissioner's approach to the GAAR.