Norfolk's Tax Status On Trial

Will Norfolk Island remain a tax haven? For that matter has it ever been one? These questions will be decided by the High Court of Australia as soon as a result of a case listed for hearing at the session starting in Melbourne in May, Esquire Nominees Ltd. v the Commissioner of Taxation.

Basically, the plaintiff is challenging the right of the commissioner to make inquiries on Norfolk Island, and also to test the validity of an assessment passed against a NI company.

These questions have been a live issue since 1964 when trading bank facilities became available on NI, and it became possible to deal in big sums of money.

Since 1966 more and more Australian companies have become registered on NI. The annual registrations have increased like this: 1966, 67; 1967, 74; 1968, 430; 1969, 401; 1970, 350.

The Deputy Commissioner of Taxation in NSW late in February issued a large number of final notices demanding lodgement with him, within 28 days, of taxation returns from NI companies. Such returns had not previously been called for.

In the past the Commissioner of Taxation has claimed to be entitled to return of income of a NI resident from an Australian source, but did not claim a return where income of a NI resident was from a NI source.

A NI solicitor, Mr. N. H. Mclntyre, in a recent letter in the Norfolk Islander, said the basic question now was whether NI suffered taxation and became forever a poor relation of the mainland, or whether the island, maintaining the most cordial relationship with the main land, could still pursue its own destiny without taxation.