GAARs and Judicial Anti-Avoidance in Germany, the UK and the EU

S. 10B. Judicial anti-avoidance

1. Introduction

This first main section is devoted to an analysis of the judicial anti-avoidance approaches as pursued by German, UK and European courts. This section will thereby lay the ground for the remaining two main sections. Key aspect of this first main section thereby lies in the task of analysing how courts dealt (and deal) with issues involving tax avoidance. This is because an understanding of the judicially developed approaches in matters concerning tax avoidance is crucial: A GAAR can only be properly understood if one also understands the judicially developed anti-avoidance concepts. Furthermore, an understanding of the judicially developed approaches to counteract abuse will also shed a light on the value of GAARs.

As a preliminary remark, it needs to be asked where the case law in matters of tax avoidance begins and where it ends. Bearing in mind that “tax avoidance” and “tax mitigation” are merely labels for a problem that involves having to ascertain the scope of a provision, there will be an endless amount of cases that could be potentially examined. After all, whenever a court denies the deduction of expenses or deems a flow of income to...