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The certainty of tax in insolvency : where does the ATO fit?

By Catherine Brown, Colin Anderson and David Morrison

Abstract

There are several ways that the Commissioner of Taxation may indirectly obtain priority over unsecured creditors. This is contrary to the principle of pari passu, a principle endorsed by the 1988 Harmer Report as one that is a fundamental objective of the law of insolvency. As the law and practice of Australia's taxation regime evolves, the law is being drafted in a manner that is inconsistent with the principle of pari passu. The natural consequence of this development is that it places at risk the capacity of corporate and bankruptcy laws to coexist and cooperate with taxation laws. This article posits that undermining the consistency of Commonwealth legislative objectives is undesirable. The authors suggest that one means of addressing the inconsistency is to examine whether there is a clearly aligned theoretical basis for the development of these areas of law and the extent that alignment addresses these inconsistencies. This forms the basis for the recommendations made around such inconsistencies using statutory priorities as an exemplar

Topics: 180109 Corporations and Associations Law, Insolvency, Taxation, Pari Passu priority, GST and incapacitated entities, ATO garnishee notices
Publisher: Thomson Reuters (Australia/NZ)
Year: 2011
OAI identifier: oai:eprints.qut.edu.au:46538

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