Hybrid Entity Double Taxation : A Case Study on the Taxation of Trans-Tasman Limited Partnerships

Hybrid entities give rise to international tax problems, and it must be acknowledged, opportunities. Why is this so? This is because, at the heart of the phenomenon, different countries tax systems treat hybrid entities in fundamentally different ways allocating income to different parties. The tax consequences of this divergence of approach by countries can lead to complex and unintended outcomes. By reference to the OECD Report on the taxation of Partnerships, this article looks at whether the treatment of trans-Tasman limited partnerships under the Australian and New Zealand Convention results in double taxation or double non-taxation. The approach taken is to use a case study to illustrate how hybrid entity double taxation arises. The result is that hybrid entity double taxation is, mostly, resolved through the operation of the Convention