n Without Prejudice - The GAAR's misuse or abuse test is dead (or should be) : tax

Volume 16, Issue 2
  • ISSN : 1681-178X



International experience has shown that abusive tax avoidance can be broken down into three categories. The first involves abnormal arrangements that are entered into or carried out in a manner which would not be employed but for the tax benefits they promise to provide. The second involves arrangements that lack commercial or economic substance, and typically involve common features such as circular cash flows, tax indifferent parties and offsetting or self-cancelling elements. In practice, these categories often overlap, involving artificial and contrived composite transactions. At the extreme end of the spectrum, arrangements in these categories may also fall foul of the substance over form doctrine.

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