The Canadian Chamber of Commerce is pleased to share post-budget comments on the general anti-avoidance rule (GAAR). Written by Steve Suarez, co-chair of the Canadian Chamber’s Economics and Taxation Committee and a partner in the Toronto office of Borden Ladner Gervais LLP, our submission:
- Proposes steps to achieve the GAAR that Parliament wants, which would produce “’reasonably predictable result[s]’ so that taxpayers can comply with the rule, and the administration and the courts can easily apply it”.
- Highlights the practical reality that virtually any commercial transaction done in something other than the least tax-efficient manner possible will come within the definition of GAAR, which contravenes Parliament’s original intention.
- Discusses suggestions for better targeting GAAR on those cases of abusive tax avoidance which GAAR is meant to address while minimizing the potential for administrative over-reach, reducing the number of GAAR disputes before the courts, and minimizing the cost and complexity of resolving those that remain.
Ultimately, the business community and the government have a shared interest in ensuring that GAAR is robust, effective, and focused exclusively and successfully on those few who engage in abusive tax avoidance.