Examines the James Hardie restructuring and considers it in light of Australia's tax system and the review of Australia's international taxation arrangements. After some introductory remarks, the article provides some background information about James Hardie and the factors influencing the restructuring, outlines the form of the restructuring and explains its key tax features, examines the tax efects of the restructuring for the Australian resident shareholders, i.e. their tax position before and after the new protocol to the Australia-USA tax treaty, considers whether the restructuring would have been prevented either by the 20% credit recommended by the Board of Taxation or by the limited exemption approach, and, reviews the characteristics leading to the restructuring in the context of the question whether it could have been prevented. The article concludes that a coordinated set of policies, some of which go beyond the recommendations of the Board of Taxation, appears to be necessary.