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In Search of the Holy Grail

Steve Edge comments on a potentially significant Hong Kong decision in Tai Hing Cotton Mill on the correct interpretation of 'tax benefit' in the context of targeted anti-avoidance rules
For years now tax administrators and tax advisers have been trying to find the appropriate balance between legislative sledgehammers that crack every nut in sight (good and bad alike) — the change of lessor ownership regime being a current example of that in the way in which it potentially affects sales of rail operating companies with no tax scheming in sight — and plastic knives that are wholly ineffective when used.
A clear hope in the current consultation is that a principles-based approach might give more broadly drafted anti-avoidance provisions an accurate compass to guide them through this moral maze.
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