The Inland Revenue Department is appealing against a High Court verdict in Christchurch, clearing two surgeons accused of tax avoidance.
The IRD says they paid themselves too little at the 39% tax rate, in order to keep more money in their own company, taxed at 33%.
The court disagreed at a hearing earlier this year, but the IRD says it does not believe the verdict correctly reflects tax avoidance
An IRD statement issued last year acknowledged there are legitimate business reasons for using entities like trusts or companies when filing tax returns, but said income substantially generated by an individual's actual work should be subject to income tax.
