Question 1: Fringe Benefit Tax
1. “The Fringe Benefit Tax in New Zealand was introduced in mid 1980’s as an antiavoidance measure for employment income”. Do you agree with the statement?
Describe your answer from the perspectives of the canons of taxation and the good tax system.
Question 2: Capital – Revenue Distinction
2. Income tax law by its very nature is a complex subject. The capital-revenue distinction is one area which causes this complexity. In New Zealand the capitalrevenue distinction is even more significant because of the lack of a comprehensive capital gains regime. Furthermore, the term “capital” is not defined in Income Tax Act 2007. Though, there is a considerable body of case law which provides useful guidance.
By examining the following two New Zealand tax cases discuss what guidance they provide to this complex area of tax law.
a. Fullers Bay of Island v CIR (2006) 22 NZTC 19,716 (CA)
b. Case W26 (2006) 22 NZTC 12,303