ISSN 1440-0405

The Journal of Australian Taxation is a peer reviewed scholarly journal publishing articles on all issues relating to taxation.

Under new editors John McLaren (Charles Darwin University) and John Passant (Australian National University) the Journal will continue its broad scope. It will embrace discussions on any aspect of taxation from any jurisdiction. The new editors would like to acknowledge the former editorship of Keith Kendall and thank him for his excellent service to the Journal.

The 2016 edition will be published by the end of February 2017. From 2017 the Journal will be open source and available online.


The editors are now calling for submissions. There is no deadline. Submissions will be received at any time during the year and once refereed and accepted the relevant article will be published online as part of the volume for that year. Any methodology is acceptable, including but not limited to legal, economic, accounting, critical, empirical and comparative approaches.

Articles between 8,000 and 12,000 words are preferred and it is unlikely that submissions of less than 5,000 words would be accepted. They must be written in accordance with the latest edition of the Australian Guide to Legal Citation (a new edition will be available sometime in 2017)

For more information or to make a submission contact John McLaren at or John Passant at


There are no fees or charges associated with submitting to or publishing in this journal.

This is now an open access journal which means that all content is freely available without charge to the user or there institution. Users are allowed to read, download, copy, distribute, print, search, or link to the full texts of the articles, or use them for any other lawful purpose without asking prior permission from the publisher or the author.

The journal is also available in a printed format if the author requires a printed copy for accreditation purposes.


Volume 18, Issue 1

The Journal of Australian Taxation has always adopted a policy of publishing articles on a wide range of tax topics. This volume is no exception. It contains seven articles from tax practitioners and academics on Australian and New Zealand tax issues.

The articles in this volume deal with a wide range of topics. Thus the first article, by Lisa Marriott and Dalice Sim, examines the attitude of over 3,000 New Zealand and Australian residents to tax evasion and welfare fraud. This is extremely timely in light of the controversial automated welfare overspending recovery program by Australian authorities. The respondents to the survey saw tax evasion as just as serious a crime as welfare fraud. This, the authors argue, conflicts with policy settings in both countries which treat welfare fraud as more serious than tax evasion. It has implications for policy makers and the judicial system alike.

In the second article Sunita Jogarajan examines the need for external scrutiny of the Australian Tax Office given the extent of the powers of the Commissioner of Taxation. The author argues that the current range of external bodies that have a role in scrutinising the ATO may be ineffective. Given the need for taxpayers to have certainty under the self‐assessment system, this article provides a thought‐provoking overview of the current situation.

Jonathan Nguyen in the third article looks at the Australian dividend imputation system and in particular the implications for corporations of a company tax rate reduction and the differential in the value of the imputation credits. It is a very timely discussion given the Australian Government’s drive to reduce the company tax rate.

Cyrus Thistleton is the author of a most comprehensive article on the general anti‐avoidance rule contained in Australia’s Goods and Services Tax legislation. In particular the author discusses the basis on which the Commissioner of taxation is empowered or required to cancel any tax benefit obtained by the taxpayer. This article is important reading for academics and tax practitioners who wish to increase their understanding of the GST GAAR.

The fifth article, by James Murray, examines the taxation consequences of companies making distributions to their shareholders by way of bonus shares; dividend reinvestment plans and profit distribution plans. The article is based on New Zealand taxation law and New Zealand’s imputation system and resident withholding tax.

The sixth article was written by David Jones, a retired tax academic from RMIT, and John Passant and John McLaren. It should be noted that this article was refereed and approved for publication prior to John McLaren and John Passant assuming the editorship of the journal. The article argues that the test of residence for a company not incorporated in Australia may be deemed to be a resident if its central management and control is in Australia without the need to show that it is also carrying on a business in Australia. This means that the ATO’s approach to this issue, contained in tax ruling TR 2004/14, may be open to serious doubt.

The last article in this edition, by Brian Dollery and Joseph Drew, illustrates the breadth of topics
published in the Journal of Australian Taxation. The article critically examines the financial, efficiency
and equity effects on councils and ratepayers as a result of the forced amalgamations of some local
government councils in New South Wales. The article provides an excellent insight into this area of
local government operations and the imposition of rates, which are a form of land tax.

John McLaren
Charles Darwin University

John Passant
Australian National University February 2017


Volume 17, Issue 2 – Wu, Brown & Brown


By Yanghui (Maggie) Wu, Philip G Brown and Rob Brown

There is very little evidence on the evasion of interest withholding tax. We find such evidence by focussing on the 5 December 2009 abolition of interest withholding tax on foreign investors in Australian government bonds. Prior to this date, foreign investors had an incentive to evade the tax by selling bonds ‘just prior to’ ex-interest days and (possibly) reinvesting on or after the ex-interest day. This practice is referred to as ‘coupon washing’. To detect the presence of coupon washing, we analyse daily trading volumes in Australian government bonds between 1998 and 2013. We find clear evidence of coupon washing in the period before the abolition of the tax. Evidence of coupon washing is much weaker after the abolition. We also find that abnormally high volumes are concentrated in high-coupon bonds, which further supports our findings, because high coupons provide a greater incentive for coupon washing than low coupons.


Volume 17, Issue 2 – Sourdin


By Tania Sourdin

Alternative Dispute Resolution (ADR) processes are increasingly being used to deal with a wide range of disputes that can include regulatory disputes involving government. This article explores the use of ADR in disputes relating to taxation and involves a consideration of effectiveness, procedural justice indicators and potential issues with the use of ADR in these disputes. In particular, perceptions of fairness and outcome are contrasted as well as indicia relating to participatory features. The article is based on a study that involved a selected sample of 118 Australian tax disputes that progressed to conciliation, mediation and evaluation over a 12 month period in 2013 and 2014. The study examined the results of 340 surveys of those involved in the sample disputes. It is suggested that procedural justice factors can impact on effectiveness of an ADR process and whether a dispute will be ‘finalised’, however, other factors that are related to the time taken and costs expended can also be relevant in shaping perceptions with different participant groups and may impact on the outcome reached.