New Zealand Law Society - Keeping up with changes in tax practice

Keeping up with changes in tax practice

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Tax specialists and commercial lawyers who want to keep up with what’s changing the game in the area of tax law have an excellent opportunity coming up. It is the NZLS CLE Ltd Tax Conference, which will be held in Auckland on 10 September.

The conference will feature “an array of topics that are front and centre for any practitioner,” says the conference chair and Chapman Tripp partner David Patterson.

Among the “really good mixture” of topics are a number which will focus on current legislative reform, current case law or recent IRD publications.

So, for tax specialists or commercial lawyers who are involved in transactional work, and who want to be as much on top of up-to-date tax law as they can be, the conference will be as good a way as one could get to keep up with what’s happening, Mr Patterson says.

One session will explore current developments in the deductability of feasibility expenditure

A focus of this session will be the recent Trustpower case. This case highlights the fact that the area is a complex one. When the High Court heard the case – Trustpower Limited v Commissioner of Inland Revenue [2014] 2 NZLR 502 – it ruled in favour of Trustpower’s position.

That was essentially that Trustpower’s costs of running its resource management consent programme were tax deductible. The High Court took the view that the expenditure was revenue in nature.

Inland Revenue appealed and the Court of Appeal, in Commissioner of Inland Revenue v Trustpower Limited [2015] NZCA 253, allowed the appeal. It held that $17.7m outlaid by Trustpower in applying for various resource consents relating to four potential electricity generation projects in the South Island was non-deductible capital expenditure.

Whether or not this case goes on to the Supreme Court may be known by the time of the conference. This matter is relevant to lawyers advising on processes that lead to expenditure on capital assets generally, Mr Patterson says.

Another session will outline current issues around limited partnerships and look-through companies.

“These are in quite common use now in commercial joint ventures for corporates and also for smaller businesses,” Mr Patterson says. “There are quite a few vagaries in how the rules around limited partnerships and look-through companies operate.”

Some of the rules are based on IRD statements and some are based on the legislation and “there’s a whole mixture of issues for people who practise in these areas.”

Another session will provide an overview of current developments in the increasingly complex area of international inter-company finance.

“The OECD have a project called BEPS – Base Erosion and Profit Shifting. All the European countries in particular are quite passionate about this and they have been exporting that passion around the world.

“Essentially what’s happening is that the governments in many of the countries have huge stress on their accounts following the global financial crisis. They are hell bent on tightening up on multi-nationals who have been, in their view, artificially reducing their tax liabilities in the various countries in which they operate,” Mr Patterson says.

“There is an Australian case, Chevron, which is about to be decided in the Federal Court of Australia.

“This session is going to look at that decision and how it interacts with some of the OECD BEPS action plan. That will be a pretty interesting session,” Mr Patterson says.

Other sessions will look at:

  • changes to the non-resident withholding tax and approved issuer levy regimes as announced in Inland Revenue’s and Treasury’s May 2015 issues paper;
  • recent judicial developments and topical issues in debt and insolvency;
  • tax issues for start-ups, which can sometimes give rise to unique and challenging tax issues;
  • GST almost 30 years on, with a focus on topical issues, core GST principles and whether the GST legislation remains fit for purpose;
  • imputation arrangements to obtain tax advantage and the recent review by the Commissioner of Inland Revenue on her approach to interpreting and applying subsection GB 35(2) of the Income Tax Act 2007; and
  • the various tax issues that arise when an immigrant or an expatriate New Zealander moves to New Zealand.

The early bird deadline for registration is 13 August. For more information on the 2015 Tax Conference see This event qualifies for 6.5 CPD hours.

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