The WHT Regulations provide that "all types of contracts and agency arrangements other than sales in the ordinary course of business" are subject to WHT at 5%. This means that sales in the ordinary course of business would not be subject to WHT. However, the WHT Regulations do not define what qualifies as "sales in the ordinary course of business".
The TAT held that what constitutes "sales in the ordinary course of business" is a question of fact and provided the following guidance for the determination –
- Whether the activity was contained in the memorandum and articles of association of the company
- The type of industry the taxpayer operates in
- The history and antecedents of the taxpayer and
- The frequency of carrying out the activity.
Read our alert and a copy of the judgement below:
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