What is Anti-Avoidance Measures under International Taxation

Tax Anti-Avoidance Measures or Rules to Implement for Save Tax Revenue of Country

Tax authorities are increasingly concerned with the loss of their share of domestic and global tax revenues to other countries through unacceptable tax avoidance rules. Most countries have its own anti-avoidance rules under their domestic tax law or judicial practices, and sometime also in their tax treaties. These measures under domestic tax law include “substance over form” doctrine to prevent SHAM TRANSACTIONS, and the commercial justification rule under the “business purpose test”. In particular, they require that transactions should not have saving as their only or domestic purpose.

Here is some relevant of the other anti-avoidance measures affecting cross-border transactions include :

1.   Transfer Pricing Rules.

2.   Antideferral Measures.

3.   Thin Capitalisation Rule.

4.   Anti-treaty Shopping Provisions.

5.   Exchange of Information between Countries.