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13.1. GAAR and General Anti-Avoidance Measures

The tax authorities are empowered to disregard or re-characterize arrangements that are entered into or carried out with the purpose of avoiding, reducing or postponing tax liability. The tax authorities may also disallow the deduction of assessed losses utilized as a result of a transfer of shareholding, where such transfer is carried out with the purpose of reducing or avoiding tax liability.

Effective 1 July 2019, the GAAR provisions have been amended to exclude related party transactions pursuant to the introduction of new transfer pricing rules (see Sec. 13.4).