Ch.39 GAAR

Question 1

iWha tis tax planning?

Answer 1

Legitimate arrangement of finacial activities that reduces tax costs and falls within the spirit of the law

Question 2

Tax evasion?

Answer 2

Ignoring specific laws to reduce taxes

Question 3

Tax avoidance

Answer 3

Using the law to minimize taexes through techniques - technically legal but consistent with the overall spirit and intent of the law

Question 4

What is GAAR?

Answer 4

It’s in place to allow the CRA to challenge a transaction or series of transactions that is not primarily for bona fide purposes other than to obtain a tax benefit

Question 5

What is required for GAAR to apply?

Answer 5

Benefit
Transaction or series of transaction was made to avoid taxes
The transactions are considered abusive tax transactions

Note:
The CRA needs to prove that it is abusive, but we need to prove the benefit and series of transactions