VAT option to tax anti-avoidance: time for a rethink?

The option to tax disapplication provisions are intended to address abuse but due to the wording of the legislation they can in many cases apply to ordinary commercial transactions. The current wording of the legislation means that the rules need to be considered mechanically on bona fide transactions where there is no intention to seek a tax advantage. This can lead to outcomes which penalise the taxpayer.

 

 

When the option to tax was introduced...