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GST/VAT general anti‑avoidance approaches: some preliminary findings from a comparative study of Australia and South Africa

Published on 01 Jul 17 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE

The goods and services tax (GST) or value-added tax (VAT) is the most rapidly spreading tax in the world. It accounts for a high proportion of tax revenue in both developing and developed countries. Despite its importance, there is a paucity of studies concerning GST/VAT avoidance. This article attempts to contribute to this relatively small body of literature by comparing and evaluating GST/VAT general anti-avoidance approaches in Australia and South Africa. Both countries have a similar common law heritage and adopted a similar GST/VAT model, although the tax commenced at different times in each country and the two taxes have slightly different bases. An examination of the Australian and South African GST/VAT anti-avoidance approaches reveals some interesting findings. The analysis undertaken by the authors suggests that, although there are differences in style in the drafting of the anti-avoidance rules, the effect of each appears to be similar in both countries.

There would appear to be two differences. First, the Australian Commissioner of Taxation has a discretion, if the Commissioner thinks it fair and reasonable, to make a compensating adjustment to the other party to the transaction if that party is disadvantaged by the Commissioner’s determination. Second, the “do nothing” defence which has been negated in Australia may possibly still be available in South Africa.

Author profiles

Binh Tran-Nam
Binh is a Professor, School of Taxation & Business Law, UNSW Australia and RMIT Asia Graduate Centre, RMIT University Vietnam, and International Fellow, Tax Administration Research Centre, Exeter University-Institute for Fiscal Studies. - Current at 03 November 2016
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Kalmen Datt
Kalmen is a senior lecturer in the School of Taxation and Business Law at the University of New South Wales, Australia and teaches courses which include GST, CGT, International Tax and Tax Litigation. Kalmen was previously a barrister in South Africa and a solicitor/barrister in NZ and has been admitted as a solicitor in Australia. He has practiced in courts of first instance and appeal. He has completed courses in mediation and has appeared in mediations and arbitrations as counsel. Prior to immigrating to Australia, Kalmen was a solicitor with Inland Revenue (IRD) in NZ advising on tax issues and was an advisor to a specialist anti avoidance team at IRD. He assisted the School of Business at the University of Auckland in teaching various tax courses. Kalmen has successfully completed the Common Professional exams in the UK. - Current at 21 October 2019
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Gerhard Nienaber

 

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