Tax avoidance

Legislative tools to challenge tax avoidance

Revenue can challenge a tax avoidance scheme under:

• the General Anti-Avoidance Rule (GAAR)
• or
• one of the Specific Anti-Avoidance Rules (SAARs).

General Anti-Avoidance Rule (GAAR)

The GAAR is set out in Section 811C of the Taxes Consolidation Act 1997. It applies to transactions which commenced after 23 October 2014. The intention of the GAAR is  to defeat tax avoidance transactions which:

• have little or no commercial purpose
• and
• are primarily entered into to obtain a tax advantage. 

If a transaction falls under the GAAR, you are not entitled to claim the tax advantage when submitting your tax return.

If Revenue believes you have participated in a tax avoidance transaction, there is no time limit on when Revenue can:

• carry out enquiries as to whether or not the transaction is tax avoidance 
• withdraw the tax advantage by amending an assessment
• and
• collect or recover any amount of tax.

Specific Anti-Avoidance Rules (SAARs)

In addition to the GAAR, there are many targeted anti-avoidance rules throughout tax legislation. These rules prohibit the misuse of certain losses, reliefs or exemptions when a particular type of transaction, or series of transactions, are undertaken. 

Revenue may use targeted anti-avoidance rules for more specific transactions than those to which the GAAR applies. 

Schedule 33 of the Taxes Consolidation Act 1997 classifies a number of these provisions as specific anti-avoidance provisions.  

A tax avoidance surcharge applies where a person seeks to obtain the benefit of any tax advantage which is withdrawn by:

• Section 811C
• or
• one of the SAARs.

The surcharge can be up to 30%.

Next: The consequences of engaging in tax avoidance