23. Transactions involving liability to tax
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(1) Where any transaction, operation or scheme (hereinafter in this subsection referred to as “a transaction”) including a transaction involving the alienation of property, which is entered into or carried out, whether before or after the commencement of this Act, has the effect of avoiding, reducing or postponing the liability to tax of any person for any year of income and the Comptroller is of the opinion that the transaction—
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(a) is entered into or carried out by means or in a manner which would not normally be employed in the entering into or carrying out of a transaction of the nature of the transaction in question; or
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(b) creates rights or obligations which would not normally be created between independent persons dealing at arm's length under a transaction of the nature of the transaction in question,
the Comptroller shall determine the liability to tax as if the transaction had not been entered into or in such other manner as he or she considers appropriate to counteract such avoidance, reduction or postponement of liability as would otherwise be effected by the transaction.
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(2) Where a resident carries on business with a non-resident and, in the opinion of the Comptroller, by reason of the relationship between such persons the course of business between them has been so arranged that the business done by the resident produces to him or her either more or less gains or profits than those which would be expected to arise from that business if such relationship had not existed, the Comptroller may determine in such manner as appears to him or her to be reasonable—
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(a) whether any additional gains or profits should be deemed to be assessable income of the resident person; and
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(b) whether any part of the gains or profits of the non-resident person should be considered to accrue from a source in Saint Lucia.
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(3) Where a loan, including a constructive loan, is made by a resident person to a non-resident person, either free of interest or at a rate of interest lower than the commercial rate generally prevailing at the time the loan was made, and the Comptroller is of the opinion that the loan is not one between independent persons dealing at arm's length with each other, interest is considered to accrue to the resident person for each year of income after the loan is made at such commercial rate as the Comptroller considers reasonable in the circumstances.
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(4) In subsection (3) a “constructive loan” means any indebtedness to a resident person arising from the carrying on of business transactions between that person and a non-resident person which remains unpaid in circumstances which in the opinion of the Comptroller would not have operated as between independent persons dealing with each other at arm's length.