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This chapter focuses on the War Revenue Ordinance 1940 proposed by the colonial government' to establish a system of income tax for the purpose of funding “gifts” to Britain in support of the war effort. It describes the three schedular taxes established by the Ordinance: property tax, salaries tax, and profits tax. On 27 June 1941 the War Revenue Ordinance 1940 was repealed in its entirety and replaced by the War Revenue Ordinance 1941. The most important change introduced by the new Ordinance was that interest tax was added to the three existing taxes. The new Ordinance redrew the line between taxable Hong Kong profits and non-taxable offshore profits; it modified the tax treatment of married couples; it also introduced a general anti-avoidance rule; it generally tightened the drafting of tax; and effected a range of other minor reforms.

This chapter examines the role played by shams in tax avoidance in New Zealand and its relationship with the general anti-avoidance rule (GAAR) encapsulated in statutory provisions. It shows that as long as the orthodox conception of the sham is employed, there is no need for such a mechanism to combat tax avoidance in a jurisdiction that has a GAAR.

The chapter examines the relationship between evasion and avoidance of tax, and the recent events which blur that distinction. The traditional distinction is that evasion is criminal and avoidance not. It has been challenged by the way in which some prosecutions are conducted; by rhetorical blurrings of the distinction so as to indicate that evaders and avoiders might be equally culpable, and that even if they are not they are two sides of the same coin; by the increase in attention to ‘offshore’—which might be a conduit either for evasion or avoidance; and by a number of other factors. The chapter argues that the distinction between evasion and avoidance is a valuable one and should not be undermined.

This chapter analyzes whether the international tax reform measures instituted under the Organisation for Economic Co-operation and Development’s (OECD) Base Erosion and Profit Shifting (BEPS) Project are effective in ensuring African countries get a fair share of taxes from multinational enterprises (MNEs) transacting within their borders, so that they can finance their development goals and promote the human rights of their citizens. The OECD chose to focus on curtailing sophisticated tax-avoidance schemes by strengthening existing anti-avoidance provisions. MNEs have abused these existing laws, however, making them largely ineffective. Given that MNEs are always a step ahead in devising new tax-avoidance strategies, one wonders whether emphasis on strengthening anti-avoidance laws will achieve much. The OECD seems to have missed an opportunity to evaluate the whole tax system and deal with the very root of the problems inherent in international taxation.

This chapter considers Kelsen’ s ‘pure theory of law’ and his principle of exclusion of contradictions in order to shed light on an area of law that he never considered: general anti-avoidance rules (GAARs) in income tax law. One cannot argue that GAARs give rise to what logicians call contradictions. Nevertheless, from a practical and substantive point of view, the effect of a GAAR could loosely be described as akin to a contradiction of norms, in logical terms a breach of the principle of exclusion of contradictions. General principles in Kelsen’ s work shed light on how GAARs operate and on the way in which they fit into the legal systems of which they form a part. Although the effect of a GAAR is similar to the effect of a breach of the principle of exclusion of contradictions, the unusual nature of tax law justifies the existence of GAARs.

As an alternative, or in addition, to the avoidance provisions available under the Insolvency Act 1986 a transaction may, in an appropriate case, be challenged under provisions of the Companies Act 2006 as a transaction exceeding constitutional limitations. Other directors’ duties may also be raised in an action, such as the duty to act in good faith to promote the success of the company.