Section 22 — State Sales Tax Ordinance, 1998

(a)

to alter the incidence or postpone the time due of any

State sales tax which is payable by or which would otherwise have been payable by any person;

(b)

to relieve any person from any liability to pay State sales tax or to make a return under this Ordinance; or

(c)

to reduce or avoid any liability imposed or which would otherwise have been imposed on any person by this

Ordinance, the Comptroller may, without prejudice to such validity as it may have in any other respect or for any other purpose, disregard or vary the arrangement and make such adjustments as he considers appropriate so as to counteract any tax advantage obtained or obtainable by that person from or under that arrangement.

(2)

Without prejudice to the generality of subsection (1), the

Comptroller may, for the purposes of this section, deem—

(a)

any person (not being, apart from this section, a taxable person) who is a party to or has participated in any way in any arrangement, to be a taxable person;

(b)

any sale of taxable goods or taxable services, that is affected by or is part of any arrangement, to be both made to and made by any taxable person or a person deemed to be a taxable person under paragraph (a);

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(c)

any sale of taxable goods or taxable services to take place in any prescribed accounting period that, but for any arrangement affected by this section, would have been the prescribed accounting period in which the sale was made;

(d)

any sale of taxable goods or taxable services to have been made, or consideration for such sale to be given, at open market value.

(3)

In this section—

“arrangement” means any agreement, contract, plan, understanding, scheme, trust, grant, covenant, disposition, transaction, and includes all steps by which it is carried into effect;

“tax advantage” includes—

(a)

any reduction in the liability of any person to pay State sales tax;

(b)

any increase in the entitlement of a person to a credit or refund of State sales tax;

(c)

any reduction in the total consideration payable by any person in respect of any sale of taxable goods or taxable services; or

(d)

any postponement of the time when State sales tax is due or payable.

(4)

This section shall not apply to any arrangement carried out for bona fide commercial reasons and had not as one of its main purposes the avoidance or reduction of State sales tax or the obtaining of any tax advantage.

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Assessment of tax surcharge