Tax Treaty Case Law around the Globe 2018

S. 339Chapter 29 New Zealand: Lin v. Commissioner of Inland Revenue (High Court and Court of Appeal of New Zealand)

Craig Elliffe

29.1. Introduction

Two important issues arise from the decision concerning the operation of article 23 of the OECD Model and its subsequent appeal. The Lin case was decided in May 2017 in the High Court in Auckland by Thomas J. This decision was appealed by the Commissioner in February 2018, and the Court of Appeal decision, overturning the High Court decision, was issued in March 2018. The application for leave to appeal was dismissed by the Supreme Court on 20 June 2018.

The first issue concerns the scope and nature of tax credits allowable under article 23 (methods for the elimination of double taxation). In particular, the case looks at whether tax credits exclusively relate to juridical double tax or whether, in certain circumstances, the credit can be extended to circumstances involving economic double tax.

Juridical double taxation, of course, occurs where comparable taxes are imposed by two different states on the same taxpayer in respect of the same income or subject matter (in the same period). One of the best examples of this form of double tax is where ...