Clause 30

Subsection (2) applies where the Comptroller is satisfied that the purpose or effect of any arrangement is directly or indirectly —

to alter the incidence of any tax that is payable by or that would otherwise have been payable by any person;

to relieve any person from any liability to pay tax or to make a return under this Act; or

to reduce or avoid any liability imposed or which would otherwise have been imposed on any person by this Act.(2) Without affecting any validity that the arrangement may have in any other respect or for any other purpose, the Comptroller must disregard or vary the arrangement and make any adjustment that the Comptroller considers appropriate, including (but not limited to) the computation or recomputation of gains or profits, or the imposition of liability to tax, so as to counteract any tax advantage obtained or obtainable by that person from or under that arrangement.(3) Subsection (1)(c) includes increasing any qualifying deduction by a transferor company to be transferred to a claimant company under section 37C, in order to reduce or avoid any liability imposed or which would otherwise have been imposed on the claimant company by this Act.(4) Nothing in this section prevents the applicability of subsection (1) to a case, or any action of the Comptroller under subsection (2) in a case, from being questioned in an appeal against an assessment in accordance with Part XVIII.(5) In this section —“arrangement” means any scheme, trust, grant, covenant, agreement, disposition, transaction and includes all steps by which it is carried into effect;“claimant company” and “transferor company” have the meanings given by section 37C(19);“qualifying deduction” has the meaning given by section 37C(14).(6) This section applies to any arrangement made or entered into before, on or after the date of commencement of section 30 of the Income Tax (Amendment) Act 2020, but not one made or entered into before 29 January 1988.(7) This section does 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 tax.Surcharge on adjustments under section 3333A.—

This section applies where, in the year of assessment 2023 or a subsequent year of assessment —

the Comptroller imposes a liability to tax or an additional amount of tax on a person for that year of assessment under section 33;

the Comptroller recomputes any gain, profit or loss of, any capital allowance allowed to, or any deduction for a donation made by, a person for that year of assessment under section 33 which results in the imposition of a liability to tax or an additional amount of tax on that person for any year of assessment; or

as a result of an adjustment under section 33, any qualifying deduction that has been transferred under section 37C by a transferor company to a claimant company is reduced or disregarded, and the Comptroller makes an assessment on the claimant company for an amount of tax or an additional amount of tax.(2) In a case mentioned in subsection (1)(a) or (b), a surcharge equal to 50% of the amount of tax or the additional amount of tax is imposed on the person, and is recoverable by the Comptroller from the person as a debt due to the Government.(3) In a case mentioned in subsection (1)(c), a surcharge equal to 50% of the amount of tax or the additional amount of tax assessed on the claimant company is imposed on the transferor company, and is recoverable by the Comptroller from the transferor company as a debt due to the Government.(4) Despite any objection under section 76 to or an appeal lodged under Part XVIII against an adjustment made under section 33 or any assessment, the surcharge must be paid —

within one month after the date a written notice of the surcharge is served in accordance with section 8(1) on the person to whom the surcharge is imposed; and

in the manner stated in the notice.(5) The Comptroller may, in the Comptroller’s discretion, and subject to any term and condition (including the imposition of interest on the surcharge) as the Comptroller may impose, extend the time within which payment is to be made.(6) Sections 86(1) to (6), 87(1) and (2), 89, 90 and 91 apply to the collection and recovery of a surcharge and any interest imposed under subsection (5), as they apply to the collection and recovery of tax.(7) The Comptroller may, for good cause, remit wholly or in part any surcharge or interest payable under this section.(8) If, upon an objection under section 76 to or an appeal lodged under Part XVIII, an assessment made pursuant to any adjustment made under section 33 is varied or annulled, then the surcharge is correspondingly increased, reduced or annulled (as the case may be), and —

if the surcharge is increased, subsection (2) or (3) (as the case may be) and subsections (4), (5), (6) and (7) apply to the increased amount of the surcharge as they apply to the surcharge; or

if the surcharge is reduced or annulled and it has already been paid to the Comptroller, the amount of the reduction or the entire amount (including any interest paid on the amount) must be refunded.(9) In this section, “claimant company”, “qualifying deduction” and “transferor company” have the meanings given by section 33(5).”.