Article 28 — Deferral of VAT on Imported Capital

1/ A registered person may apply to the Commission, in the approved form, for approval to defer the payment of VAT on imported capital goods. 2/ The Commission may approve an application under Sub-Article (1) of this Article if satisfied of the following: a) the person has kept proper records, regularly filed VAT returns by the due date, and otherwise complied with their obligations under this Proclamation, b) the person has no outstanding VAT or other tax liabilities, and c) the person has not been: (i) liable for a penalty under Article 110 of the Tax Administration Proclamation, (ii) convicted of an offence under Article 118, 119, 121, or 125 of the Tax Administration Proclamation, or (iii) liable for a similar penalty or convicted of a similar offence under the Customs Legislation. 3/ The Commission may require an applicant under Sub-Article (1) of this Article to provide security in accordance with Article 35 of the Tax Administration Proclamation as a condition of the grant of approval under Sub-Article (2) of this Article. 4/ The Commission shall notify an applicant under Sub-Article (1) of this Article of the decision on the application within 14 days of receiving the application. 5/ Subject to Sub-Article (6) of this Article, an approval under Sub-Article (2) of this Article shall apply to: a) the import of capital goods specified in the approval, or b) the import of capital goods made during a period specified in the approval. 6/ The Commission may revoke an approval under Sub-Article (2) of this Article, if the registered person: a) no longer satisfies the conditions in Sub-Article (2) of this Article, or b) the registered person transfers or disposes of the capital goods. 7/ A registered person who has been granted approval under Sub-Article (2) of this Article shall include the VAT payable on a taxable import covered by the approval in the calculation of the net VAT payable by the person under Article 48 of this Proclamation for the accounting period in which the taxable import occurred. 8/ Notwithstanding the provisions of this Article, the Ministry may, by Directive, provide the conditions under which the import VAT on capital goods may be deferred. 9/ In this Article, “Capital Goods” shall not include capital goods imported by a registered person for resale in the ordinary course of the person’s taxable activity.