Effectively if your tax arrangements are weird enough they have to be submitted to a judicial-like body to determine whether they are for some sort of legitimate business purpose or purely for the purpose of tax avoidance. An example: https://www.gov.uk/government/uploads/system/uploads/attachm...
"Paragraph C5.6.7 of the Guid
ance states “[the GAAR] rejects the
proposition that taxpayers have unlimited freedom to use their ingenuity to
reduce their tax bills by any lawful means"
"The reward was structured in the
following way: a purchase of gold for
the Employees was funded by the Company; that gold was immediately sold
by the Employees
;
the Company’s liability to pay the third party gold supplier
was settled by the Employees in return for a director’s loan account credit in
favour of the Employees; in connection with the purchase of the gold a long
term obligation was created under which the Employees were required in the
future to pay to the trustees of the EBT an amount at least equal to the
purchase price of the gold (plus indexation)."
Obviously this arrangement is nonsense and is purely for tax avoidance, so the GAAR cuts through the complexity and rules it unacceptable.
Nothing Apple does violates GAAR. It pays all the taxes it owes in every country it does business in, then it takes the remaining profits and moves them to a low tax location because repatriating them to the US would cost at least 40% in additional taxes.
Apple were apparently able to consider both Jersey and the Isle of Man (both British Crown Dependencies) for substantially reducing their tax exposure, so it's presumably questionable, but this is the first I've heard of GAAR. The UK Parliament has the ability to create primary legislation on any matter it wishes in these regions, even if by convention it rarely does, and Jersey and the Isle of Man have had arguably justified reputations as tax havens for a long time in the UK.
One only needs to look at the other leaks in this dump to see the attraction of these locations (Formula 1 driver Lewis Hamilton stashing his private jet on the Isle of Man to avoid a substantial VAT bill etc).
Effectively if your tax arrangements are weird enough they have to be submitted to a judicial-like body to determine whether they are for some sort of legitimate business purpose or purely for the purpose of tax avoidance. An example: https://www.gov.uk/government/uploads/system/uploads/attachm...
"Paragraph C5.6.7 of the Guid ance states “[the GAAR] rejects the proposition that taxpayers have unlimited freedom to use their ingenuity to reduce their tax bills by any lawful means"
"The reward was structured in the following way: a purchase of gold for the Employees was funded by the Company; that gold was immediately sold by the Employees ; the Company’s liability to pay the third party gold supplier was settled by the Employees in return for a director’s loan account credit in favour of the Employees; in connection with the purchase of the gold a long term obligation was created under which the Employees were required in the future to pay to the trustees of the EBT an amount at least equal to the purchase price of the gold (plus indexation)."
Obviously this arrangement is nonsense and is purely for tax avoidance, so the GAAR cuts through the complexity and rules it unacceptable.