The Resource Moral taxation, immoral avoidance - What role for the law?

Moral taxation, immoral avoidance - What role for the law?

Label
Moral taxation, immoral avoidance - What role for the law?
Title
Moral taxation, immoral avoidance - What role for the law?
Creator
Subject
Language
eng
Summary
Although the legal boundary between avoidance and evasion is clearly drawn by reference to what is legal and what is illegal, the distinction between the two is not so easily drawn in behavioural terms. Tax avoidance is a function of the chosen tax base and the integrity of any tax base depends upon the ability to monitor and restrain tax avoiudance behaviour as much as it depends upon the ability to contain evasion. The failure to deal satisfactorily with avoidance can be both divisive and contribute to unfairness in the tax system. A particular aspect of avoidance is the ease with which the tax base can be expressed in legislation. Legislation usually takes as its starting point the legal characterisation of property and transactions and of rights and obligations. A tax base that is concerned with economic or financial outcomes may not be suited to that approach. Such an approach can open the door to avoidance based on achieving similar outcomes by different legal means to which different tax consequences attach. Recent judicial recognition of that fact led to the development of the Ramsay approach to avoidance. The General Anti-Abuse Rule (GAAR) enshrined in the Finance Act 2013 seeks to take matters beyond Ramsay by applying an overriding "reasonableness" standard to tax avoidance arrangements. The GAAR, however, necessarily steps beyond the general law to impose tax outcomes by reference to an uncertain measure of conduct that is thought to be undeserving of a particular tax outcome. As such it is not the correct response to avoidance. The GAAR reflects the failure of current policy and legislation and in particular the failure to think more carefully about the nature of the tax base - what you want to tax - and to articulate it correctly with greater principle, clarity and purpose
Citation source
In: British tax review. - London. - (2013),
http://library.link/vocab/creatorName
Gammie, M
Geographic coverage
  • Europe
  • European Union
Language note
English
http://library.link/vocab/subjectName
  • tax avoidance
  • tax evasion
  • case law
  • Ramsay principle
  • GAAR
Label
Moral taxation, immoral avoidance - What role for the law?
Instantiates
Publication
Label
Moral taxation, immoral avoidance - What role for the law?
Publication

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