The committee would vehemently oppose a provision that failed to meet these requirements."Malcolm Gammie, the committee's Research Director, added that a general rule was never a complete answer to avoidance but most OECD countries adopted one in some form. This is particularly significant given the widely differing tax backgrounds and prospectives of its members. Nevertheless, a common position has emerged and the report is the concise view of the committee. Moreover, Inland Revenue departments must have the resources to ensure that they can administer it properly without inhibiting legitimate commercial and private activities.Graham Aaronson, the QC who chairs the committee said: "Early discussions reflected the many different views you would expect on this topic.
It also says measures must be incorporated to safeguardtaxpayers' interests and that there must be an advanced clearance procedure. Since it has a wide-ranging membership, its views, published last week, merit close attention. It concludes that, while a general anti-avoidance rule could deter avoidance, specific legislation should remain the key weapon.Having made clear its preference for a rule established by Parliament over one developed by the judicial committee of the House of Lords, the committee stresses that any rule must be sensibly targeted, with clear exemptions for abusive transactions. And in the papers relating to last week's pre-Budget statement it was indicated that it a law may be drafted by the middle of next year.But how useful would such a measure be? The Tax Law Review Committee of the Influential Institute for Fiscal Studies has just spent 18 months studying the way in which UK governments tackle tax avoidance. Accordingly, while former Chancellor Kenneth Clarke launched his "spend to save" initiative on the grounds that targetting transgressors would make life fairer for everyone, he stopped short of proposing a general anti-avoidance rule, as exists in other countries. This Government, though, seems to have other ideas. Tax accountants have broadly welcomed the continuation for the moment of legislation aimed at stopping specific wheezes, but in his first Budget Mr Brown said he had asked the Inland Revenue to start consulting on a general anti-avoidance rule. So they and their advisers should put it on their agendas, up with EMU and Year 2000 systems compliance.The writer is a partner at the London office of the international law firm Sidley & Austin..
If there is one thing that unites all Chancellors of the Exchequer, whatever their political stripe, it is tax avoidance Or measures to combat it. Which is why Gordon Brown is likely to feel a little irritated by the revelations concerning the Paymaster-General's offshore trust However, there are differences in approach. For example, given the trans-global nature of the Internet, when you include personal data on your website, are you really transferring it to every country in the world?What is important now is for the Government and the Data Protection Registrar to provide information and guidance on the adequacy of data protection regimes in non-EU countries and for you, the business, to plan new operational procedures to fit into the pre-approved transfer categories and/or to apply under one of the exemptions Businesses have less than a year to address these issues. Will it be a criminal offence? Will damages be payable to the individual whose data you have transferred? The implication of the directive is that they will but as yet we just do not know.And some big questions about the application of these new rules to the Internet remain to be answered.
Many businesses have focused upon this possible contract- based exemption as a window of opportunity, probably rightly but it would certainly be unwise to assume that your business can sort everything out by an appropriate contract with the non-EU recipient of your data, not least because prior authorisation from the relevant member state will be required before the contract approach will work.Unfortunately, it is still unclear what the penalties will be for non- compliance, whether from failing to think about the issue, or because the transfer was an e-mail sent by a colleague, or because you attempted to make an adequacy assessment but got the answer wrong. The directive suggests that those safeguards might result from appropriate contractual clauses (presumably, the contract would be between the EU transferor of data and the non-EU transferee). It would also be possible for the UK to authorise data transfers where - in the words of the directive - the transferring business "adduces adequate safeguards" with respect to data protection. So a country may be adequate for one type of data transfer but not another.Exemptions by member states may be created for journalists, so as to reconcile the rights to privacy with the rules on freedom of expression.
