Comparing the New Zealand and Australian GAAR

Abstract

This paper seeks to compare and contrast the Australian and New Zealand general anti-avoidance rules (GAAR). The paper will first discuss what is meant by the term tax avoidance and then outline the current general anti-avoidance rules in New Zealand and Australia that are designed to counter tax avoidance. In the Australian context this means not only reviewing the income tax GAAR rules but also the GST GAAR rules which are similar but different in some key respects. The paper will then compare the New Zealand GAAR as against both the Australian income tax and GST GAARs to highlight similarities and differences across these different sets of GAAR rules. Since the GAAR provisions in each jurisdiction are broad in their potential application it has largely been left to the courts to determine, by their interpretations of the GAAR rules, where the line is to be drawn between acceptable and unacceptable tax minimisation strategies.