A framework for corporate insolvency taxation: the crossroads of the theoretical perspectives in taxation law and insolvency law

Abstract

The first aim of this thesis is to develop a theoretical framework that can be used to analyse the effectiveness of Australian laws and administrative practices that sit at the crossroads of tax law and insolvency law, and to propose options for law reform and administrative reform where significant disharmony between these areas of law is identified. The second aim of this thesis is to apply the theoretical framework to assess the effectiveness of the Australian Federal Commissioner of Taxation (Commissioner) as a creditor in a corporate insolvency, and to propose law reform. In particular, this thesis applies the theoretical framework to answer the following questions: 1. Should the Commissioner have priority in a corporate insolvency? 2. Is there harmony at the intersection of tax law and insolvency law with respect to the Commissioner’s debt collection practices in the context of tax administration? 3. Is there harmony at the intersection of tax law and insolvency law with respect to the Commissioner’s powers to issue: a. notices under section 260-5 of Schedule 1 to the Taxation Administration Act 1953 (Cth) (TAA 1953)? b. director penalty notices under Division 269 to Schedule 1 of the TAA 1953 (DPNs)? c. statutory demand notices under section 459E of the Corporations Act 2001 (Cth) (Corporations Act)? The significance of this thesis is to develop an appropriate theoretical framework as a new tool to assess the effectiveness of a law, the interrelationship of laws and administrative practices with respect to both tax law and insolvency law, and to propose law reform. The theoretical framework is applied in relation to one area that sits at the intersection of tax and insolvency law, being the role of the Commissioner as a creditor in a corporate insolvency with respect to the Commissioner’s debt collection powers under the tax law and the Commissioner’s debt collection practices in the context of tax administration. Whilst the theoretical framework is applied in relation to this one particular area, it is intended that the framework has far broader application and can be used in relation to analysing the effectiveness of any law that sits at the intersection of tax law and insolvency law.