The spin of a coin: in search of a workable GAAR

Dabner, Justin (2000) The spin of a coin: in search of a workable GAAR. Journal of Australian Taxation, 3 (3). pp. 232-252.

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By broadly interpreting the general anti-avoidance rule in Part IVA of the Income Tax Assessment Act 1936, the High Court, in FCT v Spotless Services Ltd 96 ATC 5201, has exposed the inadequacies of the provision. The rejection of the "commercial transaction exception" has generated considerable uncertainty and trenchant criticism by the tax advisory profession. The provision is now unworkable. A new approach is mandated. The Review of Business Tax proposal that Part IVA be applied according to the underlying policy of the tax laws suggests the way forward. Such an approach would assimilate the Australian position with proposals considered in the United Kingdom and New Zealand and the approach achieved in Canada. However, it would involve a departure from the traditional literal approach to interpreting tax laws. Critics might question where is the protection of taxpayers that is the basis for the literal approach. This must be founded in a clear expression of objects, an independent review board and a sensible rulings, dispute resolution and penalty regime.

Item ID: 26022
Item Type: Article (Research - C1)
ISSN: 1440-0405
Date Deposited: 11 Jul 2013 02:24
FoR Codes: 18 LAW AND LEGAL STUDIES > 1801 Law > 180125 Taxation Law @ 100%
SEO Codes: 97 EXPANDING KNOWLEDGE > 970118 Expanding Knowledge in Law and Legal Studies @ 100%
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