In Australia there have been increased calls for the adoption of an alternative tax vehicle, especially for the use of small businesses. One option that has been raised is for the introduction of a new hybrid corporate entity. This proposed entity would provide members with limited liability, but would be taxed in a similar manner to a partnership, in that income and losses would be directly attributed to members. Internationally since the early 1990's there has been considerable movement towards providing alternative legal forms for business. Through these developments, economic gains can be attained providing real choice in the way that investments can be organised and utilised. Recently Australia recognised to a limited extent such hybrid entities for international taxation purposes for controlled foreign companies. Should the Australian Government extend beyond this international recognition and introduce a hybrid entity for Australian domestic tax purposes? New Zealand has already adopted two hybrid entities for taxation purposes known as Qualifying Companies and Loss Attribution Qualifying Companies. What lessons can be learnt from the New Zealand experience? This paper will review both Australia's recent international recognition of hybrid entities, and the calls for such an entity to be adopted domestically. The paper will then critically analyse New Zealand's Qualifying Companies and Loss Attribution Qualifying Companies to ascertain whether there is any quality in this regime. The paper will then make recommendations as to whether Australia should adopt similar hybrid entities for its domestic tax purposes.