Impermissible avoidance arrangement.

1. (1) An impermissible avoidance arrangement means an arrangement, the main purpose of which is to obtain a tax benefit, and it—
   • (a) creates rights, or obligations, which are not ordinarily created between persons dealing at arm’s length;
   • (b) results, directly or indirectly, in the misuse, or abuse, of the provisions of this Act;
   • (c) lacks commercial substance or is deemed to lack commercial substance under section 97, in whole or in part; or 2. Section 95 renumbered as sub-section (1) thereof by Act 20 of 2015, s. 26 (w.e.f. 1-4-2015).
   • (d) is entered into, or carried out, by means, or in a manner, which are not ordinarily employed for bona fide purposes.
2. (2) An arrangement shall be presumed, unless it is proved to the contrary by the assessee, to have been entered into, or carried out, for the main purpose of obtaining a tax benefit, if the main purpose of a step in, or a part of, the arrangement is to obtain a tax benefit, notwithstanding the fact that the main purpose of the whole arrangement is not to obtain a tax benefit.

¹ Ins. by Act 17 of 2013, s. 26 (w.e.f. 1-4-2016). Earlier inserted by Act 23 of 2012, s. 41 (w.e.f. 1-4-2014)

³ Ins. by s. 26, ibid. (w.e.f. 1-4-2015).