La Trobe Law School PhD student, Mr John Tretola, presented a paper titled ‘Comparing the Canadian and Australian General Anti-avoidance Rules’ at the 28th 2016 Australasian Tax Teachers Association (ATTA) Conference at the University of New South Wales in Sydney from 20 to 22 January 2016.
This paper seeks to compare and contrast the operation and structure of both Australian and Canadian general anti-avoidance rules (GAAR) with the aim to consider whether the Australian GAAR can benefit from any features of the Canadian GAAR.
The Australian GAAR is found in Part IVA of the Income Tax Assessment Act 1936 and it has been in operation in its present form since 1981 replacing a former version that was contained in section 260 of the Income Tax Assessment Act 1936 whereas the Canadian GAAR, which is found in section 245 of the Canadian Income Tax Act 1985, is much more recent having only been in place since 1988. There are many similarities in both GAARs as both refer to an avoidance transaction (referred to as ‘scheme’ in the Australian GAAR) and tax benefit obtained by the avoidance transaction and both seek to disallow any tax benefit that arises from the avoidance transaction.
The Australian GAAR, through section 177D(b) of the Income Tax Assessment Act 1936 attacks ‘schemes’ that have been entered into by the taxpayer for the sole or dominant purpose of obtaining the tax benefit obtained in connection with the ‘scheme’ whereas the Canadian GAAR, by contrast, only disallows avoidance transactions where these are determined by the courts to be ‘abusive’ as they result directly or indirectly in the abuse or misuse of provisions of the Canadian tax law.
John Tretola is currently completing his doctoral thesis at La Trobe Law School, under the supervision of Mr Keith Kendall. His thesis compares the general anti-avoidance rules in a range of jurisdictions such as Canada, New Zealand, the United States, the United Kingdom, Hong Kong, South Africa and Australia. John Tretola is also employed as a Lecturer in the Law School at the University of Adelaide teaching subjects such as Business Tax and GST, Legal Aspects of International Business and Commercial Law.