The Supreme Court’s First Ever GAAR Decision

Originally published in International Tax Review (1 April 2012).

In December 2011, the Irish Supreme Court delivered its judgments in the first case before it on the Irish general anti-avoidance rule (the "GAAR"). Although the GAAR was introduced in 1989, the decision in O'Flynn Construction Ltd and others v Revenue Commissioners is the first time the Supreme Court has considered it.

The Supreme Court held, by a three to two majority, that the transactions carried out by the taxpayer infringed the GAAR. The court upheld the argument of the Revenue Commissioners that the use of specific relief provisions by the taxpayers amounted to a misuse or abuse of those provisions, having regard to the purpose for which the relief was provided.