Value Added Tax Act (Cap. 406), article 74

74. (1) Any artificial or fictitious scheme which directly or indirectly results in the accrual of a tax advantage when the e ssential 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 thi s Act, shall be disregarded in such a manner as to redefine the scheme so as to re-establish the situation th at would have prevailed in the absence of such scheme. 50 CAP. 406.] VALUE ADDED TAX (2) Notwithstanding the other provisions of this Act, no amount shall be treated as input tax of a person in terms of article 2 2(2) to the extent to which it represents tax chargeable on goods or servic es having been the subjects of V A T fraud committed upstream or downstream in the chain of supply, when that person knew or should have known of such fraud, irrespec tive as to whether that perso n 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 ass essment in accordance with articles 31, 32 or 33 determining the tax li ability or the entitlement to any input tax credit, refund or set-off of t ax of the said person, for any tax period, i n such manner and in such amo unt as may be necessary according to t he circumstances of the case: Provided that this shall not preju dice the right of a person to object to such an assessment and to appeal from a decision of t he Commissioner refusing that objection. The relevant provisions o f this Act relating to objections and appeals shall apply mutatis mutandis . (4) In this article "scheme" includes any transaction or sequen ce of transactions, disposition, agr eement, arrangement, trust, gr ant, covenant, transfer of assets, st ructure, alienation of property , irrespectively of the date on which such scheme was made, enter ed into or set up. Power to make regulations. Amended by: X. 2003.39; XIII. 2015.153; XIII.2024.44.