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Mr. Christophe J Waerzeggers and Mr. Cory Hillier

Appendix A. Sample GAAR Set out below is a sample GAAR. It is important to note that this sample GAAR is general in nature and in the form of a simplified legal provision. Importantly, it does not take into account the individual circumstances of any particular tax system. The ultimate form of any GAAR to be adopted by any given country would need to take into account the specific legal tradition and system—including any constitutional limitations—as well as the political and administrative structure and fiscal policies of the country concerned

Mr. Christophe J Waerzeggers and Mr. Cory Hillier
Tax avoidance continues to attract attention globally with strong support for tax law reform at all levels. This Tax Law IMF Technical Note focuses on some of the key design and drafting considerations of one specific legal instrument (being, a statutory general anti-avoidance rule (GAAR)) which is often considered by authorities to combat unacceptable tax avoidance practices. A GAAR is typically designed to strike down those otherwise lawful practices that are found to be carried out in a manner which undermines the intention of the tax law such as where a taxpayer has misused or abused that law. However, the objective of combating unacceptable tax avoidance can itself make the legal design of a GAAR complex. This is simply 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. However, the GAAR should be designed and applied so as not to inhibit or impede ordinary commercial transactions. This Tax Law IMF Technical Note discusses and explores how drawing a line between those arrangements which should be caught by the GAAR is a matter of degree and can be delicate.
Mr. Christophe J Waerzeggers and Mr. Cory Hillier

connection with the OECD/G20 BEPS Project. This recent development also highlights some of the key legal design considerations when developing or amending a GAAR and so is discussed further below. II. Overview of the Application of the Sample GAAR A sample generic GAAR is set out at Appendix A . This sample GAAR is general in nature and in the form of a simplified legal provision. Importantly, it does not take into account the individual circumstances of any particular tax system. The ultimate form of any GAAR to be adopted by any given country would need to take