Authors: Howard Davis, Mike Lennard
Published: 26 April 2023
Pages: 37

Introduction

This paper addresses the 30 September 2022 Supreme Court decision in Frucor Suntory New Zealand Limited v Commissioner of Inland Revenue [2022] NZSC 113 and its implications.

Please note that Howard and Mike have contributed different parts of the paper. The views expressed by one of the writers do not necessarily reflect the views of the other.

In this paper, Mike begins in Part 1, by way of background, with a historical perspective of the New Zealand anti-avoidance law before Frucor (SC).

In Part 2, Howard sets out the facts and then (in Part 3) discusses the majority decision in Frucor (SC). In Part 4, Howard then briefly summarises Inland Revenue’s new, post- Frucor (SC) Interpretation Statement 23/01 “Tax avoidance and the interpretation of the general anti-avoidance provisions sections BG 1 and GA 1 of the Income Tax Act 2007”.

Mike then addresses two interesting and somewhat controversial topics: the implications of Frucor (SC) for documentary evidence in tax disputes (Part 5) and the Frucor (SC) penalties decision (Part 6).

Finally, in Part 7, Howard makes some further observations on the Frucor (SC) penalties decision and in the Appendix about the Ben Nevis (SC) [107] two-stage inquiry approach.
 

Content outline

• Background - Anti-avoidance law before Frucor (SC)
• Facts of Frucor (SC)
• Majority decision in Frucor (SC)
• Post-Frucor (SC) Inland Revenue interpretation of tax avoidance
• Implications of Frucor (SC) for documentary evidence in tax disputes
• Frucor (SC) penalties decision
• Additional Inland Revenue observations