The Institute of Chartered Accountants in England and Wales (ICAEW) has voiced concern over the draft legislation of a General Anti-Avoidance Rule, warning that the proposed GAAR is confusing and could be in breach of international law.
The ICAEW has cited Article 27 of the Vienna Convention, in which the UK agreed that ‘a party may not invoke the provisions of its internal law as justification for its failure to perform a treaty’.
Frank Haskew, head of the ICAEW’s Tax Faculty, stressed that the ICAEW supports the notion of a GAAR, but is concerned about the ‘considerable uncertainty’ attached to the draft legislation.
He argued that it could take up to 20 years test the GAAR’s provisions in court.
The ICAEW has called for the GAAR’s implementation date of July 2013 to be deferred.
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