Adrian Sawyer

Complexity of Tax Simplification: A New Zealand Perspective

Compared to many developed countries, New Zealand’s tax system is relatively simple, coherent and transparent. Why is this so? A number of reasons may underlie this, including New Zealand’s constitutional structure (operating with a unicameral Parliament, having a single House of Representatives, in which the New Zealand Government in conjunction with its coalition partners, holds a majority), coupled with a unitary State (which eliminates the issues that frequently arise in a Federal system). A further reason may be attributed to the relatively transparent and coherent public sector, to which the private sector has ready access, not only through making submissions, but also being able to discuss issues and share information (where permitted), which is facilitated by the small population and transparent and coherent tax policy process.

Demystifying the challenges involved in publishing a high quality taxation paper

Purpose - – The purpose of this paper is to offer strategies that can enhance the likelihood of successfully developing an idea through to publication in a high-quality journal. The paper also seeks to demystify what lies behind the editorial and review processes that form part of that journey. Design/methodology/approach - – This paper is based on the author’s 20+ years’ experience as a journal editor, editorial board member, Findings - – Successfully publishing in high-quality journals is a combination of a well-developed idea, meticulous planning and execution of the research, a thorough review of the target journal’s scope and expectations, attention to detail in drafting the paper and reasoned and reflective responses to guidance and recommendations from editors and referees, supplemented by some good fortune and natural talent. Practical implications - – This paper is intended primarily to be a resource that demystifies what lies behind the process for researchers seeking to develop their profile as an author of high-quality papers in high-quality peer-reviewed journals with a focus on the discipline of taxation. In this regard its primary intended audience is thesis students and those relatively new to academia. Originality/value - – Existing contributions to the literature concerning the publication process are numerous, but few studies offer a succinct summary for new and emerging researchers in mind, especially those undertaking taxation research.

Binding Rulings: A Comparative Perspective

Binding rulings are fundamental in providing business certainty with respect to the taxation treatment of particular transactions. In this chapter the New Zealand rulings regime is reviewed from the perspective of its purposes and essential characteristics, and is then compared to the Australian regime, focusing on the differences in philosophy and substance between the two regimes. The results of an international comparison of rulings systems conclude the analysis, highlighting the differences in approach between countries.

An update on Hong Kong’s exchange of information developments and engaging with BEPS

ABSTRACT The Hong Kong Special Administrative Region (HKSAR) implemented automatic exchange of information (AEOI) with the Inland Revenue (Amendment) (No. 3) Ordinance 2016 coming into effect on 30 June 2016. This development is one of the latest phases in the reform of the HKSAR’s exchange of information capability, and is an important issue as AEOI ‘challenges’ the HKSAR’s approach to privacy of information. AEOI follows earlier legislative reform to permit the HKSAR to enter into tax information exchange agreements (TIEAs), and the signing of a Model 2 intergovernmental agreement (IGA) under the United States’ (US’s) Foreign Account Tax Compliance Act (FATCA). The HKSAR has been actively engaged in the Group of Twenty (G20)/Organisation for Economic Co-operation and Development’s (OECD’s) Base Erosion and Profit Shifting (BEPS) initiative, particularly as an Associate Member that has enabled it to facilitate implementation of the relevant BEPS Action Plans in both the HKSAR and internationally. Collectively AEOI and BEPS have ‘opened up’ the HKSAR to greater international scrutiny and will introduce greater complexity into the HKSAR’s tax system. This paper briefly reviews the historical developments in information exchange in the HKSAR, focussing on the implications of AOEI and BEPS developments for the HKSAR, with some preliminary thoughts as to what the future may look like for businesses operating in the HKSAR.

The Complexity of Tax Simplification: Experiences From Around the World

It seems clear that simplicity in taxation has considerable potential advantages, but there are important reasons why tax systems become complex. In a paper presented at the Conference of the Tax Research Network (TRN) in 2014, the present authors reviewed progress towards simplification in Australia, New Zealand, Turkey and the UK, finding that attempts towards greater simplicity in taxation had not been very successful (Budak et al., 2014). One of the main reasons is that attempts to simplify tax systems are only likely to be successful and enduring if they take account of the reasons why taxation is complex. It may then be possible to find the right balance between simplicity and the aims of a tax system in terms of efficiency, equity and so on, as well as taking account of the complex environment in which tax systems have to operate. Such factors will change over time, and so the appropriate balance between simplicity and complexity is also likely to change. In addition, the situation is likely to differ from jurisdiction to jurisdiction.

Developing Countries and the Automatic Exchange of Information Standard A 'OneeSizeeFitssAll' Solution?

Recently, the Organisation for Economic Co‑operation and Development (OECD), at the invitation of G20 countries, developed what it refers to as the new single global standard for the automatic exchange of information (AEOI) between key revenue authorities worldwide. This standard, if adopted by a country, would require the annual AEOI relating to financial accounts obtained from financial institutions and exchanged in a common reporting format or standard. Theoretically, the adoption of the AEOI standard on a global scale would equip all countries to address the illicit flow of money to locations which result in tax avoidance and other forms of non‑compliance. However, the success of the AEOI standard relies on countries to be able to first, collect and supply the information required and second, effectively use and benefit from the information provided to them. This means that such an adoption places an onerous administrative burden on a country and this is arguably especially the case for developing countries which do not have the same level of administrative resources and intellectual capital as developed countries.Studies have revealed that developing countries support the AEOI and view it as an opportunity to address illicit financial flows. However, the implementation of such a regime, according to the OECD, requires a sound legal framework, technical know‑how, infrastructure and personnel capacity. Consequently, developing countries are most concerned about the lack of capacity to: (1) collect the information locally to allow full reciprocal information exchange; (2) analyse the information received; and (3) deal with information technology. The purpose of this article is to critically analyse the OECD’s AEOI standard and assess the standard from the perspective of developing countries and emerging economies, including Global Forum members. It does so with the aim of revealing the “unique” administrative and enforcement issues which may arise for those countries and offering possible solutions. These possible solutions offered adopt a case study approach to the Asia‑Pacific region.

Will Hong Kong Succumb to International Pressure on Taxation Matters

Abstract Internationally the pressure on nations perceived to be uncooperative and lacking in transparency in the operation of their taxation systems is intensifying. The Hong Kong Special Administrative Region (‘the HKSAR’) is not immune from feeling this pressure, and appears to be relenting, in part at least, through the recent gazetting and enactment of the Inland Revenue (Amendment) Ordinance 2013, which enables enhanced information exchange under comprehensive double tax agreements and the entering into of tax information exchange agreements. Momentum is also gathering pace as nations clamber to negotiate an intergovernmental agreement with the United States under its much criticised Foreign Account Tax Compliance Act (‘FATCA’). The HKSAR has relented further through negotiating an in substance agreement under the FATCA as at May 2014. Further pressure may come as well with the recent OECD’s Base Erosion and Profit Shifting (‘BEPS’) initiative. This article outlines the implications of these international developments, and examines the HKSAR’s responses to date.