Which of the following statements regarding GAAR is true?
A) The purpose of GAAR is to catch tax evaders.
B) The Canada Revenue Agency states that "A transaction will not be an avoidance transaction if the taxpayer establishes that it is undertaken primarily for bona fide business, investment or family purposes."
C) When an avoidance transaction takes place, the anti-avoidance rule is automatically applied in all circumstances.
D) Individuals who organize their affairs in order to pay as little tax as possible will automatically be subject to GAAR.

Question

Quizplus · Accepted Answer

GAAR (General Anti-Avoidance Rule) is designed to prevent tax avoidance, not evasion, and it applies only when transactions are primarily for tax avoidance rather than legitimate business or personal purposes.

Which of the Following Statements Regarding GAAR Is True