General Anti-Avoidance Rules (GAAR) are statutory or judicially developed (doctrine) rules that empower tax authorities to deny taxpayers the benefit of abusive schemes, arrangements or transactions where these has been entered into primarily for tax-avoidance purposes.
Examples are the “fraus legis” principle applied in the Netherlands, the German “Prudent business manager” test, the Norwegian principle of “gjennemskjaering”, the Danish “realitetsgrundsætning”, the French principle of “abnormal act of management” and the US principel of “commercial rationality”.
In common for these rules are that economic substance is preferred over legal form, as legal form can more easily be manipulated in controlled environments.
Specific Anti-Avoidance Rules (SAAR) are typically very targeted legislation that removes or reduces the tax effect of certain transactions. Examples are Interest Limitation Rules, Controlled foreign Companies (CfC), Exit Taxation, Hybrid Mismatch Rules, Diverted Profit Tax, Digital Service Tax.