During their time at KPMG vacationers learn a range of important lessons about tax, not least of which is about statutory interpretation. Thankfully, the courts have in recent times provided guidance for our vacationers, and useful reminders for the rest of us.
In 2012 the High Court considered the characterisation of distributions made by Crown to Publishing and Broadcasting in 2002 in Consolidated Press Holdings. In providing its conclusion, the High Court reminded us:
- the task of statutory construction begins and ends with the text
- legislative history and extrinsic materials can be useful in understanding context, but they 'cannot displace the meaning of the statutory text'
While this is true of interpreting domestic law, Justice Davis in Task Technology Pty Ltd reminds us that extrinsic materials are relevant when interpreting tax treaties:
- 'the text of a treaty is to be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context'
- extrinsic materials should be used to confirm the ordinary meaning, and to provide clarification if 'the meaning is ambiguous or obscure, or leads to a result that is manifestly absurd or unreasonable'
Finally, Justice Collier made an obvious but important point for our vacationers (and the Australian Taxation Office) last week in Nelson: the Commissioner summarises his view of the law in Taxation Rulings; the law is something else altogether.
So you can read the law or, 'you got a question, you can ask the 8 ball'.