Tax Avoidance: Causes and Solutions - Scholarly Commons Home

Section CB 13 covers the situation where one person acquires land in circumstances in
which he or she would attract a liability to tax under ss CB 5–CB 12 and then he or she
transfers land to an associated person.
Section GD 10 notionally increases the amount of rent received by a property owner from a
relative or a related company where the rent is less than the market rate.
Section GD 11 permits the Commissioner, if he is satisfied that a financial arrangement has
been issued or transferred so as to defeat the application of the financial arrangements rules,
to substitute an arm's-length consideration for the consideration used by the parties.
Sections GD 12 and GD 12B are directed towards situations where parties providing goods
and services used in the production of a film are not dealing on an arm's-length basis with
the film investors and towards arrangements designed to attract a more favourable
operation of ss DS 2, EJ 7 and EJ 8 relating to the film expenditure than would otherwise
be the case.
Section GD 13 sets out the transfer pricing regime, which is directed at multi-national
companies that shift profits from New Zealand to countries with low tax costs.
Section HC 1, under which losses incurred by a special partnership registered on or after 1
August 1986 cannot be used to claim deductions against other income derived by the
partners.
Section MBB 6(9), which allows the Commissioner to refuse to accept a transfer from a tax
pooling account to a taxpayer's account, or to reverse any such transfer, if it is considered
that the request is made for the purpose or effect of tax avoidance.
Other provisions in the Income Tax Act 2004, in specifying the conditions for liability or
eligibility for tax benefit, also have specific anti-avoidance rules designed to prevent an
undesirable exploitation of conditions for liability or benefits expressly provided.
6.2 Other jurisdictions
In some country, the application of some specific anti-avoidance provisions depends on a
finding of the taxpayer’s purpose for entering into the transaction.
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