Abstract:
This article examines the similarities between the New Zealand courts’ analysis in recent tax avoidance cases and the international transfer pricing regime. We argue that the application of the parliamentary contemplation test provided by the Supreme Court shares many of the same features as the transfer pricing regime. In particular, the combination of economic analysis and market pricing referred to in recent cases suggests that the general anti-avoidance rules have, in effect, imposed on taxpayers a type of domestic transfer pricing regime. This requirement to demonstrate the commerciality of arrangements and provide evidence of market-based arrangements and pricing will inevitably create new uncertainties for New Zealand taxpayers.
