High Court confirms that forfeiture of criminal proceeds is not 'payment in lieu' of tax
Mr Li and his company, AA Taxation & Accounting Service Ltd ("AA Taxation") applied for three declaratory orders under Declaratory Judgment Act 1908 to vindicate their contention that the forfeiture of assets by Mr Li and his wife under the Criminal Proceeds (Recovery) Act 2009 ("CPRA") may be treated as 'payment in lieu' of tax.
Wylie J declined to grant each of the three declarations sought by Mr Li and AA Taxation.
By way of counterclaim, the CIR sought five declarations on various grounds. Of these:
- Wylie J declined to grant two declarations in relation to whether any assets of AA Taxation were restrained or forfeited in the CPRA proceeding because that issue was not determined in the CPRA proceeding.
- Wylie J granted three declarations sought by the CIR, and emphasised that the relevant restraining orders and asset forfeiture orders did not represent the payment of tax; and the CIR was/is not prevented from collecting the tax owed by Mr Li and/or AA Taxation.
Criminal Proceeds (Recovery) Act 2009, ss 21(1)(a), 28(1)(c), 33(1), 35, 59(1)(b), 95 High Court Rules 2016, r 4.4(1)(c)
Tax Administration Act 1994, ss 6, 6A, 89AB(4)(a), 89C(c), 89O(1B)(b), 109, 143B
Li and AA Taxation & Accounting Service Ltd v CoP & CIR  NZHC 514