Cap. 395 Art. 41Bad debts.

(1) Where -

(a) a registered person has carried on a business activity for consideration in money; and

(b) that registered person has furnished a return in relation to the tax period during which the business activity was carried on and has properly accounted for tax on that business activity under this Act; and

(c) the registered person has written off as a bad debt the whole or part of the consideration not paid to him; and

(d) the registered person has taken all reasonable steps to then the Director may allow the registered person to make a deduction under article 36(2) of that portion of the amount of tax chargeable in relation to that business activity as the amount written off as a bad debt bears to the total consideration for the activity. The deduction shall be made from the tax due at the time it is allowed and may be carried forward.

(2) Where any amount in respect of which a deduction has been made in accordance with subarticle (1) is at any time wholly or partly recovered by the registered person, that portion of the amount of the deduction allowable under subarticle (1) as the amount of the bad debt recovered bears to the bad debt written off shall be deemed to be the tax charged in relation to a business activity carried on during the tax period in which the bad debt is wholly or partly recovered.