Article 61 — Assessment of Recipient of a Supply

1/ This Article shall apply where a registered person has, in consequence of misrepresentation or fraud by the recipient of a supply, incorrectly treated the supply as: a) an exempt supply, b) a Zero-rated supply, or c) not otherwise subject to VAT. 2/ Where this Article applies, the Tax Authority may assess the recipient of the supply for payment of the VAT due in respect of the supply, and any late payment interest and late payment penalty imposed as a result of the incorrect VAT treatment of the supply. 3/ The Tax Authority shall serve a notice of an assessment made under Sub-Article (2) of this Article on the recipient of the supply specifying the particulars set out in the Regulations. 4/ Sub-Article (2) of this Article shall not preclude the Tax Authority from recovering the whole or part of the VAT due in respect of the supply, together with any late payment interest and late payment penalty, from the registered person who made the supply, but the Tax Authority may not recover more than the total amount of VAT, and late payment interest and late payment penalty, payable in relation to the supply. 5/ Any amount recovered from the recipient of the supply under this Article is credited against the liability of the supplier in respect of the supply and any amount recovered from the supplier is credited against the liability of the recipient of the supply under this Article. 6/ A supplier who pays VAT, and late payment interest and late payment penalty, assessed to the recipient of the supply under Sub-Article (1) of this Article may recover the amount from the recipient of the supply. 7/ An amount assessed under this Article shall be treated, for all purposes of this Proclamation and the Tax Administration Proclamation, as VAT charged under this Proclamation. 8/ Nothing in the Tax Administration Proclamation shall limit the power of the Tax Authority to amend an assessment, including a self-assessment, of the registered person making the supply to give effect to Sub-Article (4) of this Article. 9/ In this Article: “Late payment interest” means late payment interest imposed under Article 37 of the Tax Administration Proclamation. “Late payment penalty” means late payment penalty imposed under Article 104 of the Tax Administration Proclamation.