General anti-abuse rule

A general anti-abuse rule is used to prevent the use of ‘abusive’ transactions or arrangements, which may be legal within the parameters of the Law, but are not in- line with the Law’s intended spirit and purpose.413

The rule allows the FTA to counteract or adjust Corporate Tax advantages obtained as a result of transactions or arrangements which are considered to be abusive (by the application of a test).414 The test is whether, having regard to all of the relevant circumstances, it can be reasonably concluded that the transactions and

arrangements were entered into without a valid commercial reason and their main purpose is to obtain a Corporate Tax advantage that is not consistent with the intention of the Law.

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