Trans-Tasman Triangular Taxation Relief - Part One

Abstract

In March 2002 the finance ministers of New Zealand and Australia released a joint discussion document on trans-Tasman triangular taxation. proposals represented are a significant step towards addressing one of the major taxation barriers to trans-Tasman investment. 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.-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 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.