Practical Problems from Publication of the Commissioner’s Interpretation Guidelines

This paper addresses the issue of the several kinds of statements issued by the New Zealand Commissioner of Inland Revenue, in particular focusing on policy statements and interpretation guidelines. These statements are essentially legal opinions but unlike binding rulings, these are not binding. The paper addresses a New Zealand Inland Revenue exposure draft of an interpretation guideline on form and substance. The draft contains, in effect, instruction on legal reasoning. The article argues that an exposure draft is not an appropriate vehicle for that purpose. The paper also examines the New Zealand Inland Revenue interpretation guideline on shams, and the department's policy statement on s 99 of the Income Tax Act 1976, the New Zealand general anti-avoidance rule, questioning whether the approach of issuing policy statements on general anti-avoidance is sound tax administrative practice. While conceding the difficulties arising from inconsistency in jurisprudence in tax cases, the paper asserts the need for certainty to generate efficiency in decision making