The first aim of this paper is to provide a comparative analysis of the domestic anti-avoidance rules that Brazil, Colombia, South Africa, Uruguay and Uganda have taken to tackle aggressive tax planning that may have an influence on tax arbitrage, conduit and holding companies. The second aim is to assess whether the rules introduced by developing countries are consistent with the principles of good governance and fiscal transparency and whether these rules contribute to enhance the relationship between taxpayers and the tax administration. Finally, and following the analysis and assessment made of the rules to tackle aggressive tax planning in the surveyed countries this paper will provide tax policy recommendations for enhancing fiscal transparency.
This paper argues that in order to keep the balance between the need for jurisdictions to enforce their tax rules and the taxpayer’s right to have certainty in the tax rules applicable to their business activities, transparency in aggressive tax planning should be evaluated on the basis of the availability, clarity, simplicity and reliability of the anti-avoidance rules. Fiscal transparency requires the drafting of tax rules to be clear for the tax administration to enforce them and for the taxpayer to rely on them. In this framework the notion of transparency has a broader meaning than the one provided by the OECD regarding exchange of information.
It is also argued that fiscal transparency needs to address the relationship between the taxpayer and the tax administration. This relationship means on the one hand that the governments (tax administration) are able to have access to the information regarding the activities of the taxpayer; and on the other hand that taxpayers voluntary provide disclosure on the way that the economic activities or businesses are being structured in a country. In short, and as rightly pointed out by Schoueri and Barbosa the notion of transparency “should be extended to the state itself and to covering the tax system as a whole”.