IRD to Appeal Surgeon Tax Avoidance Case

February 9, 2010 New Zealand Taxation

Year 2~Day 146 +117/366: Me and My Feet--Long StoryThe New Zealand Inland Revenue Department (IRD) will be in the Court of Appeals this week in an effort to overturn a landmark court decision, which found tax evasion allegations against two medical professionals refuted.

In a court action that will be closely monitored by both the medical profession and other high-cost professionals the IRD is seeking to claim that two Christchurch based orthopedic surgeons were using company and trust structures to pay themselves less than the typical rate for their profession. The IRD initiated court action against the two doctora, and the High Court found against the department in April.

Due to the wide spreading implications of any decision made in the proceedings great attention is being paid to the case, with some speculation arising that it could lead to Government legislative action. Bill English, New Zealand Finance Minister, has indicated that he is concerned of possible precedent stemming from the Courts ruling against the IRD, which would see a sizeable shrink to the Government’s tax stake. Robin Oliver, IRD Director of Tax Policy, has indicated to the Government Finance and Expenditure Select Committee that a ruling against the IRD would see a significant drop in tax revenues, though he also admitted that his department had not yet been able to quantify the potential impact.

Photo by Old Shoe Woman