Cap. 406 Art. 74Generalanti-abuse provision.

(1) Any artificial or fictitious scheme which directly or indirectly results in the accrual of a tax advantage when the essential aim of that scheme is for a person to obtain said advantage the grant of which would be contrary to the purpose of the provisions of this Act, shall be disregarded in such a manner as to redefine the scheme so as to re-establish the situation that would have prevailed in the absence of such scheme.

(2) Notwithstanding the other provisions of this Act, no amount shall be treated as input tax of a person in terms of article 22(2) to the extent to which it represents tax chargeable on goods or services having been the subjects of VAT fraud committed upstream or downstream in the chain of supply, when that person knew or should have known of such fraud, irrespective as to whether that person actively participated in that fraud.

(3) When the Commissioner has reason to believe that the provisions of sub-articles (1) or (2) apply, he may make an assessment in accordance with articles 31, 32 or 33 determining the tax liability or the entitlement to any input tax credit, refund or set-off of tax of the said person, for any tax period, in such manner and in such amount as may be necessary according to the circumstances of the case:

Provided that this shall not prejudice the right of a person to object to such an assessment and to appeal from a decision of the Commissioner refusing that objection. The relevant provisions of this Act relating to objections and appeals shall apply mutatis mutandis.

(4) In this article "scheme" includes any transaction or sequence of transactions, disposition, agreement, arrangement, trust, grant, covenant, transfer of assets, structure, alienation of property, irrespectively of the date on which such scheme was made, entered into or set up.