General anti-avoidance rule targets arrangements lacking commercial substance to deny tax benefits and recharacterise transactions. The Chapter establishes a general anti-avoidance framework by defining when an arrangement is an impermissible avoidance arrangement-one entered into mainly to obtain a tax benefit that creates non-arm's-length rights or obligations, results in misuse or abuse of the Code, lacks commercial substance, or is carried out by means not normally used for bona fide purposes. It defines related operative concepts including accommodating party, associated enterprise, arm's length price, round trip financing, and tests for commercial substance to identify and address tax-motivated transactions.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
General anti-avoidance rule targets arrangements lacking commercial substance to deny tax benefits and recharacterise transactions.
The Chapter establishes a general anti-avoidance framework by defining when an arrangement is an impermissible avoidance arrangement-one entered into mainly to obtain a tax benefit that creates non-arm's-length rights or obligations, results in misuse or abuse of the Code, lacks commercial substance, or is carried out by means not normally used for bona fide purposes. It defines related operative concepts including accommodating party, associated enterprise, arm's length price, round trip financing, and tests for commercial substance to identify and address tax-motivated transactions.
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