Article 38 - Fair Market Value

1) The value of a Supply is its Fair Market Value, instead of any actual Consideration paid, in cases where each of the following applies:

a) a Supply is made between Related Persons, as defined in the Agreement or in these Regulations,

b) the Consideration for the Supply is less than the Fair Market Value of the Supply,

c) the Customer is not entitled to a full Input Tax deduction in relation to the Supply.

2) For the purposes of the first paragraph of this article, the Fair Market Value is the Consideration that would be payable for a Similar and Contemporaneous Supply of Goods or services freely offered and made between Persons who are not Related Persons.

3) A Similar and Contemporaneous Supply means another Supply of Goods or services supplied at the same time that are either identical to, or closely or substantially resemble, the Goods and services being supplied.

This shall be ascertained based on all relevant factors including the characteristics, quality, quantity of the Goods and services, the place and date of Supply and reputation of the Supplier.

4) In cases where the value of a Similar and Contemporaneous Supply is not able to be ascertained, the Taxable Person or Authority may prescribe an alternative Fair Market Value based on other comparable transactions which resemble the supply of Goods and services, or the costs of the Supplier to make the supply, whichever is higher (with the decision of the Authority to prevail in the event of a difference).