Section 66

Tax avoidance schemes 

(1) Notwithstanding anything in this Act, if the Commissioner is satisfied that –

• (a) a scheme has been entered into or carried out;
• (b) a person has obtained a tax benefit in connection with the scheme; and
• (c) having regard to the substance of the scheme, it would be concluded that a person, or one of the persons, who entered into or carried out the scheme did so for the sole or dominant purpose of enabling the person referred to in paragraph (b) to obtain a tax benefit, the Commissioner may determine the tax liability of the person who obtained the tax benefit as if the scheme had not been entered into or carried out.

(2) If a determination is made under subsection (1), the Commissioner shall issue an assessment giving effect to the determination.

(3) A determination under subsection (1) shall be made within five years from the last day of the tax period to which the determination relates.

(4) In this section – 

“scheme” includes a course of action, and an agreement, arrangement, promise, plan, proposal, or undertaking, whether express or implied, and whether or not legally enforceable; and 

“tax benefit” means –

• (a) a reduction in the liability of a person to pay tax;
• (b) an increase in the entitlement of a person to a deduction for input tax;
• (c) an entitlement to a refund;
• (d) a postponement of a liability for the payment of tax;
• (e) an acceleration of an entitlement to a deduction for input tax;
• (f) any other advantage arising because of a delay in payment of tax or an acceleration of the entitlement to a deduction for input tax;
• (g) anything that causes a taxable supply or taxable import not to be a taxable supply or taxable import, as the case may be; or
• (h) anything that gives rise to a deduction for input tax for an acquisition or import that is used or is intended to be used other than in making taxable supplies.

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