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  Microsoft PowerPoint - 8 Thursday - Session 1 (Role and features of GAAR)

Definition of a tax benefit 3. Purpose Test 4. Exception or relieving provision 5. (...) Determination of tax consequences 3 9 Sample GAAR • Transaction results in a tax benefit • The sole, principal or one of the principal purposes of the transaction was to obtain the tax benefit • The transaction frustrates, defeats or abuses the purpose of the relevant statutory provision 10 Canadian GAAR Where a transaction is an avoidance transaction, the tax consequences to a person shall be determined as is reasonable in the circumstances in order to deny a tax benefit that, but for this section, would result, directly or indirectly, from that transaction or from a series of transactions that includes that transaction. 11 Canadian GAAR An avoidance transaction means any transaction: (a) that, but for this section, would result, directly or indirectly, in a tax benefit, unless the transaction may reasonably be considered to have been undertaken or arranged primarily for bona fide purposes other than to obtain the tax benefit; or 12 South African GAAR An avoidance arrangement is an impermissible avoidance arrangement if its sole or main purpose was to obtain a tax benefit and — (a) in the context of business — (i) it was entered into or carried out by means or in a manner which would not normally be employed for bona fide business purposes, other than obtaining a tax benefit; or (ii) it lacks commercial substance, in whole or in part, 4 13 South African GAAR (b) in a context other than business, it was entered into or carried out by means or in a manner which would not normally be employed for bona fide business purposes, other than obtaining a tax benefit; 14 South African GAAR (c) in any context — (i) it has created rights or obligations that would not normally be created between persons dealing at arm’s length; or (ii) it would result directly or indirectly in the misuse or abuse of the provisions of this Act 15 Article 29(9) UN Model Notwithstanding the other provisions of this Convention, a benefit under this Convention shall not be granted in respect of an item of income or capital if it is reasonable to conclude, having regard to all relevant facts and circumstances, that obtaining that benefit was one of the principal purposes of any arrangement or transaction that resulted directly or indirectly in that benefit, unless it is established that granting that benefit in these circumstances would be in accordance with the object and purpose of the relevant provisions of this Convention. 16 Definition of Transaction • Definition should be broad enough to cover any action that results in tax avoidance • Terms used: transaction, arrangement, scheme • Example: “any course of action, agreement, arrangement, understanding, promise, plan, proposal, or undertaking, whether express or implied and whether or not enforceable” 5 17 Series of Transactions • GAAR should apply to a series of transactions • Series should include at least transactions where there is a binding obligation to carry out one transaction if another one occurs • Alternatively, series can be defined more broadly to include any transaction that is related or connected to another one • Should apply to past and future transactions 18 Definition of Tax Benefit • GAAR should apply only to transactions that result in reduction of tax • “any reduction, avoidance or deferral of tax” • Perhaps should also apply to other amounts such as interest, tax installments, and tax refunds • Should be an easy condition to meet 19 Definition of a Tax Benefit • Theoretically, definition may require a comparison of the tax consequences of the transaction with the tax consequences of an alternative transaction • Benefit does not have to be quantified • Problem where transaction does not result in immediate tax benefit, but allows benefit to be realized in the future (e.g. increase in cost) 20 Purpose Test • Most GAARs contain a purpose test • GAAR applies if the sole or primary purpose is to obtain a tax benefit • New Zealand GAAR uses a one of the main purposes test as does UN Model general anti- abuse rule • No difference between “main,” “dominant,” “primary” or “principal” • Ancillary or incidental purpose is not sufficient 6 21 Purpose Test • One of the main purposes test is easily satisfied • If a transaction results in a tax benefit, it will be difficult for the taxpayer to argue that none of the purposes was to get that benefit • Therefore, the exception will likely be the critical factor in applying the GAAR 22 Purpose Test • A main or primary purpose requires that the purpose of obtaining a tax benefit is more important than any other purpose for the transaction • Requires taxpayers, tax authorities and courts to determine if a transaction has multiple purposes and, if so, what is the main purpose • Main purpose doesn’t have to be more important than all the other purposes 23 Purpose Test • Onus of proof may be an important factor in weighing multiple purposes • Does the taxpayer or the tax authorities have the burden of proof with respect to purpose? • Assessment may be presumed to be correct so burden is on the taxpayer 24 Purpose Test • GAAR can be worded to put the burden on the taxpayer – “unless it is proved or established by the taxpayer . . .” • Appropriate to put the burden on the taxpayer to establish that the main purpose of a transaction is not to obtain a tax benefit because the taxpayer has access to all the relevant information 7 25 Purpose Test • Purpose should be determined on the basis of objective evidence rather than the taxpayer’s subjective intention • GAAR can refer to the purpose of the transaction rather than the taxpayer’s purpose • Also GAAR can refer to purpose “reasonably considered on the basis of the relevant facts and circumstances” 26 Exception or Relieving Provision • Australian GAAR applies if the dominant purpose is to avoid tax without any exception • If there is no exception, the GAAR might apply to transactions that are not offensive in terms of the policy of the statute • Thus, such a GAAR relies on the discretion of the tax authorities not to apply the GAAR to transactions that avoid tax in accordance with the policy of the statute 27 Exception or Relieving Provision • Most GAARs provide an exception or additional condition for the application of the GAAR • Some GAARs apply only if the transaction is contrary to the object and purpose of the relevant provisions of the statute • Some GAARs apply only if the transaction results in a “misuse or abuse” of the statute 28 Exception or Relieving Provision • Exception is difficult to draft in language that provides clear guidance as to what transactions are caught by the GAAR • Exceptions that refer to transactions that are in accordance with or not contrary to the object and purpose of the statute are effectively interpretive rules • They require a determination of the purpose of the relevant provisions of the statute 8 29 Exception or Relieving Provision • Exception that is an interpretive rule may be difficult to apply especially for courts that interpret tax statutes literally • Risk that GAAR could be rendered meaningless • Alternatives: base the exception on objective factors such as artificiality, lack of commercial or economic substance or list factors courts must consider 30 The Role of Economic Substance • Economic substance is often the most important factor in applying a GAAR • As a general principle, tax should apply to the economic substance rather than the legal form of transactions • Most tax systems adhere to legal form to some extent • Important for the GAAR to apply on the basis of economic or commercial substance 31 The Role of Economic Substance • Meaning of economic substance is vague • In general, it means the non-tax consequences of a transaction • Indicators of a lack of economic substance: absence of pre-tax profit and no or limited risk of loss; tax-indifferent parties; no change in the financial position of the parties 32 Determination of Tax Consequences • If the GAAR applies, how should the tax consequences be determined?

Score: 477772 - https://www.un.org/esa/ffd/wp-...08_GAARs_D3_1_Role-of-GAAR.pdf

  32_mus_e.PDF

32_mus_e.PDF 1 Household Members in Sampled Households Using Computer at Home - 2001 Computer used for No. of household members reporting Playing games, fun 1,326 Internet surfing 1,054 E-mail 1,023 Chat 461 Internet telephone 353 Doing office work at home 485 Part time job 37 Education purposes 1,248 Fax 167 Other purposes 121 CENTRAL STATISTICS OFFICE 2 1. (...) Available at work Continuous Multi-Purpose Household Survey 4 Continuous Multi-Purpose Household Survey 3. (...) Q13. For which purposes do you use the computer AT HOME? 1. Playing games 2.

Score: 475735.1 - https://www.itu.int/ITU-D/ict/...otswana04/doc/doc/32_mus_e.pdf

  bop.PDF

bop.PDF TRADE MEASURES FOR BALANCE-OF-PAYMENTS PURPOSES 194 DECLARATION ON TRADE MEASURES TAKEN FOR BALANCE-OF-PAYMENTS PURPOSES Adopted on 28 November 1979 (L/4904) The CONTRACTING PARTIES, Having regard to the provisions of Articles XII and XVIII:B of the General Agreement; Recalling the procedures for consultations on balance-of-payments restrictions approved by the Council on 28 April 19701 and the procedures for regular consultations on balance-of-payments restrictions with developing countries approved by the Council on 19 December 19722; Convinced that restrictive trade measures are in general an inefficient means to maintain or restore balance-of-payments equilibrium; Noting that restrictive import measures other than quantitative restrictions have been used for balance-of-payments purposes; Reaffirming that restrictive import measures taken for balance-of- payments purposes should not be taken for the purpose of protecting a particular industry or sector; Convinced that the contracting parties should endeavour to avoid that restrictive import measures taken for balance-of-payments purposes stimulate new investments that would not be economically viable in the absence of the measures; Recognizing that the less-developed contracting parties must take into account their individual development, financial and trade situation when implementing restrictive import measures taken for balance-of-payments purposes; Recognizing that the impact of trade measures taken by developed countries on the economies of developing countries can be serious; Recognizing that developed contracting parties should avoid the imposition of restrictive trade measures for balance-of-payments purposes to the maximum extent possible; _______________ 1BISD 18S/48-53. 2BISD 20S/47-49. TRADE MEASURES FOR BALANCE-OF-PAYMENTS PURPOSES 195 Agree as follows: 1. The procedures for examination stipulated in Articles XII and XVIII shall apply to all restrictive import measures taken for balance-of-payments purposes. (...) All restrictive import measures taken for balance-of-payments purposes shall be subject to consultation in the GATT Committee on Balance-of- Payments Restrictions (hereinafter referred to as "Committee"). 5.

Score: 472050.83 - https://www.wto.org/english/docs_e/legal_e/tokyo_bop_e.pdf

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Score: 470974 - https://www.itu.int/myworkspace/manifest.webmanifest

  196 TOKYO ROUND AGRE

196 TOKYO ROUND AGREEMENTS TRADE MEASURES FOR BALANCE-OF-PAYMENTS PURPOSES 197 DECLARATION ON TRADE MEASURES TAKENPRIVATE FOR BALANCE-OF-PAYMENTS PURPOSES Adopted on 28 November 1979 (L/4904) The CONTRACTING PARTIES, Having regard to the provisions of Articles XII and XVIII:B of the General Agreement; Recalling the procedures for consultations on balance-of-payments restrictions approved by the Council on 28 April 19701 and the procedures for regular consultations on balance-of-payments restrictions with developing countries approved by the Council on 19 December 19722; Convinced that restrictive trade measures are in general an inefficient means to maintain or restore balance‑of‑payments equilibrium; Noting that restrictive import measures other than quantitative restrictions have been used for balance‑of‑payments purposes; Reaffirming that restrictive import measures taken for balance-of-payments purposes should not be taken for the purpose of protecting a particular industry or sector; Convinced that the contracting parties should endeavour to avoid that restrictive import measures taken for balance-of-payments purposes stimulate new investments that would not be economically viable in the absence of the measures; Recognizing that the less-developed contracting parties must take into account their individual development, financial and trade situation when implementing restrictive import measures taken for balance-of-payments purposes; Recognizing that the impact of trade measures taken by developed countries on the economies of developing countries can be serious; Recognizing that developed contracting parties should avoid the imposition of restrictive trade measures for balance-of-payments purposes to the maximum extent possible; _______________ 1BISD 18S/48-53. 2BISD 20S/47-49. (...) Contracting parties shall promptly notify to the GATT the introduction or intensification of all restrictive import measures taken for balance-of-payments purposes. Contracting parties which have reason to believe that a restrictive import measure applied by another contracting party was taken for balance-of-payments purposes may notify the measure to the GATT or may request the GATT secretariat to seek information on the measure and make it available to all contracting parties if appropriate. 4. All restrictive import measures taken for balance-of-payments purposes shall be subject to consultation in the GATT Committee on Balance-of-Payments Restrictions (hereinafter referred to as "Committee"). 5.

Score: 468211.5 - https://www.wto.org/english/docs_e/legal_e/tokyo_bop_e.doc

  United Nations Security Council Counter-Terrorism Committee holds special meeting on preventing expl

The meeting –  Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms  – was held against the backdrop of the significant and growing threat posed to Member States by the exploitation of ICT, in particular the Internet and social media, for terrorist purposes. (...) Representatives of the private sector underscored their commitment to preventing the exploitation of ICT for terrorist purposes. Maryam Mujica, Public Policy Team Manager for Twitter, highlighted that the company “has suspended over 360,000 accounts for threatening or promoting terrorist acts” since mid-2015. (...) Reham Abdullah Salamah Media coverage Related media coverage Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session III) Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session II) Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session I) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session V) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session IV) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session III) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session II) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session I)     Tags:  ICT  internet  social media  information technology  special meeting Donate facebook twitter youtube flickr instagram Footer A-Z Site Index Contact Copyright FAQ Fraud Alert Privacy Notice Terms of Use

Score: 468211.5 - https://www.un.org/securitycouncil/ctc/node/21317

  United Nations Security Council Counter-Terrorism Committee holds special meeting on preventing expl

The meeting –  Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms  – was held against the backdrop of the significant and growing threat posed to Member States by the exploitation of ICT, in particular the Internet and social media, for terrorist purposes. (...) Representatives of the private sector underscored their commitment to preventing the exploitation of ICT for terrorist purposes. Maryam Mujica, Public Policy Team Manager for Twitter, highlighted that the company “has suspended over 360,000 accounts for threatening or promoting terrorist acts” since mid-2015. (...) Reham Abdullah Salamah Media coverage Related media coverage Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session III) Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session II) Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session I) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session V) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session IV) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session III) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session II) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session I)     Tags:  ICT  internet  social media  information technology  special meeting Donate facebook twitter youtube flickr instagram Footer A-Z Site Index Contact Copyright FAQ Fraud Alert Privacy Notice Terms of Use

Score: 468211.5 - https://www.un.org/securitycou...lds-special-meeting-preventing

  E/C.18/2016/CRP.20 D

This is particularly important for the purposes of determining the object and purpose of the relevant provisions of the Convention. (...) To determine whether or not one of the principal purposes of [any person concerned with] [Note for the Committee: Article XX refers to the purpose of a transaction or arrangement not the purpose of a person. (...) The reference to “one of the principal purposes” in the Article means that obtaining the benefit under a tax convention need not be the sole or dominant purpose of a particular arrangement or transaction.

Score: 468193.36 - https://www.un.org/esa/ffd/wp-...eps-general-anti-avoidance.pdf

  ITU Publications : Conference Publications

The Final Report contains the Dubai Declaration, the Conference's contribution to the ITU Strategic Plan for the Telecommunication Development Sector, the Dubai Action Plan (DuAP) focusing on the programmes and regional initiatives, and the resolutions approved by the Conference directed towards the purposes and objectives of the ITU Telecommunication Development Sector for the four-year period 2015-2018. (...) The Final Report contains the Dubai Declaration, the Conference's contribution to the ITU Strategic Plan for the Telecommunication Development Sector, the Dubai Action Plan (DuAP) focusing on the programmes and regional initiatives, and the resolutions approved by the Conference directed towards the purposes and objectives of the ITU Telecommunication Development Sector for the four-year period 2015-2018. (...) The Final Report contains the Istanbul Declaration, the Strategic Plan of the Telecommunications Development Sector, the Istanbul Action Plan (ISAP) focusing on the programmes, activities, special initiatives, resolutions approved and recommendations made by the conference directed towards the purposes and objectives of the ITU Telecommunications Development Sector for the f

Score: 466940.53 - https://www.itu.int/dms_pages/itu-d/opb/tdc/D-TDC-RSS.xml

  Security Council -  information technology

The meeting – Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms – was held against the backdrop of the significant and growing threat posed to Member States by the exploitation of ICT, in particular the Internet and social media, for terrorist purposes. (...) Reham Abdullah Salamah Media coverage Related media coverage Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session III) Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session II) Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session I) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session V) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session IV) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session III) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session II) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session I)     Front Page Article:  Special meeting of the Security Council Counter-Terrorism Committee on Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms 16-00152a_web-image.png   Member States continue to face a significant and growing threat from the abuse of information and communication technologies (ICT), in particular the Internet and social media, for terrorist purposes. (...) Reham Abdullah Salamah Media coverage Related media coverage Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session III) Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session II) Special meeting of the Counter-Terrorism Committee: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session I) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (1 December 2016: Session V) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session IV) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session III) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session II) CTED-organized meeting: Preventing the exploitation of information and communication technologies (ICT) for terrorist purposes, while respecting human rights and fundamental freedoms (30 November 2016: Session I)     Front Page Article: 

Score: 466888.96 - https://www.un.org/securitycou...il/ctc/taxonomy/term/1070/feed