As the tax agency had aggressively examined and determined the suspected tax avoidance schemes, several litigations were sued by the taxpayers. The tax agency has justified its tax assessments based on the‘restructured contract approach in private law’, however, the court has not always judged favorable decisions.
The main purpose of this article is to reconsider the economic rationality of tax avoidance scheme from a viewpoint of the possibility of earning a sufficient pre-tax profit.
To clarify this purpose, I introduce the two major cases for tax avoidance litigation, the Film-lease case where the agency finally won and the Aircraft-lease case where the agency lost. Through the contrast of these cases, I would mention how the tax reduction effects were created in the schemes and whether the economic substances of these lease business activities can be recognized without the tax reduction effects.
I would finally suggest how the tax agency would conduct tax examinations against the tax avoidance