Article 50 – General anti-abuse rule

1. This Article applies to a transaction or an arrangement if, having regard to all relevant circumstances, it can be reasonably concluded that:

1. 1. the entering into or carrying out of the transaction or arrangement, or any part of it, is not for a valid commercial or other non-fiscal reason which reflects economic reality; and
   2. the main purpose or one of the main purposes of the transaction or arrangement, or any part of it, is to obtain a Corporate Tax advantage that is not consistent with the intention or purpose of this Decree-Law.

2. For the purposes of this Article, a Corporate Tax advantage includes, but is not limited to the following:

1. 1. A refund or an increased refund of Corporate Tax. 
   2. Avoidance or reduction of Corporate Tax Payable.
   3. Deferral of a payment of Corporate Tax or advancement of a refund of Corporate Tax.
   4. Avoidance of an obligation to deduct or account for Corporate Tax.

3. Where the provisions of this Article apply to a transaction or arrangement, the Authority may make a determination that one or more specified Corporate Tax advantages obtained  as a  result of  the transaction or arrangement are to be counteracted or adjusted.

4. If a determination is made under Clause 3 of this Article, the Authority must issue an assessment giving effect to the determination, which may include:

1. 1. allowing  or  disallowing  any  exemption,  deduction  or  relief  in  calculating  the Taxable Income or the Corporate Tax Payable, or any part thereof;
   2. allocating any such exemption, deduction or relief, or any part thereof, to any other Persons;
   3. recharacterising for the purposes of this Decree-Law the nature of any payment or other amount, or any part thereof; or
   4. disregarding the effect that would otherwise result from the application of other provisions of this Decree-Law, and can make compensating adjustments to the Corporate Tax liability of any other Person affected by the determination made by the Authority.

5. For  the  purpose  of  determining  whether  this  Article  applies  to  a  transaction  or arrangement, the following must be considered:

1. 1. The manner in which the transaction or arrangement was entered into or carried out.
   2. The form and substance of the transaction or arrangement.
   3. The timing of the transaction or arrangement.
   4. The result of the transaction or arrangement in relation to the application of this Decree-Law.
   5. Any change in the financial position of the Taxable Person that has resulted, will result, or may reasonably be expected to result, from the transaction or arrangement
   6. Any change in the financial position of another Person that has resulted, will result, or may reasonably be expected to result, from the transaction or arrangement.
   7. Whether the transaction or arrangement has created rights or obligations which would not normally be created between Persons dealing with each other at arm’s length in respect of the relevant transaction or arrangement.
   8. Any other relevant information and circumstance

6. In  any  proceeding  concerning  the  application  of  this  Article,  the  Authority  must demonstrate that the determination made under Clause 3 of this Article is just and reasonable.