Abstract:
In March 2002 the finance ministers of New Zealand and Australia released a
joint discussion document on trans-Tasman triangular taxation. The proposals
represented are a significant step towards addressing one of the major taxation
barriers to trans-Tasman investment. The discussion document invited
interested parties to present submissions by 3 May 2002. This article
examines:
the origins of triangular taxation, the merits of the New Zealand and Australian government’s joint
proposal (called “The Pro rata Approach to Triangular Taxation”), an alternative solution, and ad hoc solutions. From the perspective of trans-Tasman individual shareholders, the pro rata
proposal is an improvement compared to the current position, but it is not the
optimal solution. From their perspective the most tax effective option is what is
known as the “full streaming” solution. However both governments are
concerned about the fiscal risks of the streaming alternative and the fact that it
might signal a greater acceptance of streaming which is not the case.
