The Three Steps of GAAR

Please see Vern Krishna’s latest article for the Taxnet Pro: Tax Disputes & Resolution Centre titled, “The Three Steps of GAAR” where he discusses the general anti-avoidance rule as a statutory commercial commercial purpose test. There are two types of tax avoidance; tax mitigation and “abusive” tax avoidance. Parliament enacted GAAR to combat “abusive” tax avoidance. Tax mitigation uses the Westminster principle which allows taxpayers to mitigate their taxes by arranging their affairs in any lawful manner. The GAAR is a statutory commercial purpose test that looks at all of the steps of a transaction or series of transactions to determine whether the arrangement “abuses” the Act or is within the policy of the statute.

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Vern Krishna is Of Counsel at TaxChambers LLP and a Professor of Common Law at the University of Ottawa. Vern is a national expert in the area of tax and is the author of fifteen texts in tax, international tax, and business law and numerous articles and case comments. His work is often cited by the Supreme Court of Canada and he is listed in the Lexpert Directory of Best Lawyers in Canada – both in Tax Law and Estates and Trusts (2006 to present).

Vern’s practice is comprised of tax litigation and dispute resolution, international tax, tax planning and wealth management. He acts as counsel in income tax matters, representing corporate and individual clients with Canada Revenue Agency, administrative appeals and negotiations. In addition, Vern has significant experience litigating at the Tax Court of Canada, the Federal Court, the Federal Court of Appeal and the Supreme Court of Canada. As one of Canada’s leading legal scholars, Vern has made remarkable contributions to the legal profession. He is a member of the Order of Canada and Queen’s Counsel, a recipient of the Queen’s Diamond Jubilee Medal and the Governor General’s 125th Anniversary of the Confederation of Canada Medal, as well as a Fellow of the Royal Society of Canada and the Certified General Accountants of Canada.

In addition, Vern has been a Bencher of the Law Society of Upper Canada since 1991 and served as its elected head (Treasurer) from 2001–03.