An amendment is being made to the anti-arbitrage rules for IFRS taxpayers. Each of sections EW 15E, EW 15F and EW 15G of the Income Tax Act 2007 and sections EW 15D and EW 15E of the Income Tax Act 2004 will have a new subparagraph added to ensure they fully implement the original policy for use of the relevant tax methods.
The changes are effective from 1 April 2008 for the Income Tax Act 2007 and 1 April 2007 for the Income Tax Act 2004.
The changes ensure that the relevant methods can be used for financial arrangements which are treated under IFRS as hedges of non-financial arrangements.
The original anti-arbitrage rules in these sections did not achieve the intended effect and subsequent amendment in 2008 also did not remedy this aspect of the rules.