Agnieszka Olesinska
General anti-avoidance rule in Australian Income Tax (Part IV A of ITAA 1936)
General anti-avoidance rule in Australian Income Tax (Part IV A of ITAA 1936)
Summary
The article focuses on recent Australian’s experiences with general anti-avoidance rule (GAAR), which has a long history in Australian tax system. GAAR has been introduced to protect the integrity of the income tax system by ensuring that arrangements that have been contrived to obtain tax benefits will fail. It is possible to apply GAAR only when dominant purpose for entering into the arrangement is to enable the taxpayer to obtain a tax benefit. Where Part IVA is applied a taxpayer is liable to pay penalties and interest charges as well as the increase in tax.