## Introducing a General Anti-Avoidance Rule (GAAR): Ensuring That a GAAR Achieves Its Purpose

_Tax Law Technical Note, January 31, 2016_

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## Bibliographic details
- Authors: Christophe J Waerzeggers, Cory Hillier
- Published: January 31, 2016
- Series: Tax Law Technical Note
- DOI: https://doi.org/10.5089/9781513515823.008

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### Overview and purpose
- Tax avoidance remains a prominent global issue, prompting tax law reform at multiple levels.
- This Tax Law IMF Technical Note focuses on key design and drafting considerations for a statutory general anti-avoidance rule (GAAR).
- A GAAR is typically designed to strike down otherwise lawful practices that are carried out in a manner which undermines the intention of the tax law (for example, where a taxpayer has misused or abused that law).

### Core findings and analysis
- The objective of combating unacceptable tax avoidance complicates GAAR legal design because the phrase “tax avoidance” means different things to different people.
- Whatever the form of a GAAR, it should:
  - Give effect to a policy that seeks to strike down blatant, artificial or contrived arrangements which are tax driven.
  - Be designed and applied so as not to inhibit or impede ordinary commercial transactions.
- Drawing a line between arrangements that should be caught by the GAAR and those that should not is a matter of degree and can be delicate.
- The Note discusses and explores how that line can be drawn and the implications of different drafting and design choices.

### Policy considerations and recommendations
- Design GAARs to target blatant, artificial, or contrived tax-driven arrangements.
- Ensure GAAR drafting and application preserve and do not impede ordinary commercial transactions.
- Recognize and address the inherent ambiguity in the term “tax avoidance” through careful drafting and interpretive guidance.
- Balance the anti-avoidance objective against legal certainty for taxpayers and commercial actors.

### Subject and keywords
- Subject: Anti-avoidance rules, Double taxation, Exports, International trade, Legal support in revenue administration, Revenue administration, Tax avoidance, Tax law, Tax policy, Taxes
- Keywords: Anti-avoidance rules, company B, Double taxation, economic gain, export exemption, Exports, GAAR determination, general anti-avoidance rule, Global, introduce a General Anti-Avoidance Rule, purpose test, sample GAAR, tax authority, Tax avoidance, tax benefit, Tax law, taxpayer, TLT

*Introducing a General Anti-Avoidance Rule (GAAR): Ensuring That a GAAR Achieves Its Purpose, Christophe J Waerzeggers and Cory Hillier, Tax Law Technical Note 2016, 001 (2016).*

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_Source: https://www.imf.org/en/publications/tax-law-technical-note/issues/2016/12/31/introducing-a-general-anti-avoidance-rule-gaar-ensuring-that-a-gaar-achieves-its-purpose-43662_