The General Anti-Avoidance Rules in International Tax Law and the Rule of Law – The Issue of Predictability and Taxpayers’ Rights

Abstract: This paper addresses a principle in international taxation that has long been a subject of controversy in many countries regarding the countering of abusive maneuverings in tax matters and had engendered debates amongst academic scholars concerning its predictibility. This anti-abuse principle, doctrine or clause in international tax matters had over the years received many names according to variant applied in each country. It is mentioned sometimes or refer to in many jurisdictions as: the principle of economic reality, the doctrine of economic substance, theory of valid economic motives, the principle of substance over form, abuse of the law, theory of the new realism etc. However, inspite of its variation in countries, it is internationally known as the ‘’General Anti-Avoidance Rule’’ (or GAAR), generally covering abusive arrangements, and it is distinguished from the SAAR (‘’Specific Anti-Avoidance Rule’’), insofar as these latter rule apply to specific status in dealing with specific tax issues. The long time perspective regarding the principle that is expounded in this discussion paper contain some of the most relevant and important contexts in international tax law. It is interesting that this paper seeks to catapult vis-à-vis the GAARs along side the rule of law regarding its conformity.