Abstract
As in many countries around the world, the debate about tax planning concerns its limits, and there is a clash between two perspectives on the subject. On the one hand, there is a traditional perspective, whose advocates argue for the need to preserve the legal security of the taxpayer and the use of a more formalist interception method of tax rules. On the other side is the contemporary perspective, which seeks to balance the need to protect the taxpayer against abuse of tax authorities, but without neglecting the fact that the taxpayer sometimes practices abusive tax planning. At the center of this debate is the Federal Supreme Court (STF), a Brazilian constitutional court, which will examine the constitutionality of the sole paragraph of Article 116 of the National Tax Code, which for some academics is considered the Brazilian GAAR. The present paper aims to introduce and analyze some landmark points of the debate in Brazil, highlighting the legal reasoning deployed in this debate and the challenges for de constitutional process.
Highlights
Since the beginning of the 21st century, due to a significant increase in tax avoidance, there has been a growing debate about tax planning
The present paper aims to introduce and analyze some landmark points of the debate in Brazil, highlighting the legal reasoning deployed in this debate and the challenges for de constitutional process
Increasing importance has been conferred upon general anti-avoidance or anti-abuse rules (GAAR), which have been introduced in many jurisdictions to improve the capacity of the tax authorities to tackle, at least, the abusive forms of tax planning
Summary
Since the beginning of the 21st century, due to a significant increase in tax avoidance, there has been a growing debate about tax planning. The introduction of a GAAR must be performed within an adequate legal framework that ensures predictability and impartiality, as well having proper taxpayer safeguards against the tax authorities’ abuses. This concern is relevant in developing countries, where tax administration cannot always manage the level of discretion that a GAAR demands. In this process, the judiciary branch assumes a fundamental role once the judicial response will confirm or not of the legality of that inquiry. Our purpose is to show some landmark points of the debate in Brazil and demonstrate how it is developing, highlighting the academic debate and the legislative, administrative and judicial response concerning tax avoidance
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