• (a)a registered person has made a taxable supply for consideration in money; and
• (b)that registered person has furnished a return in relation to the taxable period during which the supply was made and has properly accounted for tax on that supply as required 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 or her; and
• (d)the registered person has taken all reasonable steps to recover the bad debt; and
• (e)the registered person satisfies the Chief Executive Officer that there is no reasonable or probable expectation that the bad debt will ever be recovered,

then the Chief Executive Officer may allow the registered person to make a deduction under section 39(2) of that portion of the amount of tax chargeable in relation to that supply as the amount written off as a bad debt bears to the total consideration for the supply, provided that where goods and services are supplied under—

• (i)a hire purchase agreement (being a conditional sale agreement whereby the property in the goods will pass to the bailee); or
• (ii)a financial lease (being an agreement to lease whereby the lessee is expressly required or has the option to purchase the goods subject to the lease at a guaranteed residual value or nil),

the registered person shall only make a deduction under this Act of the tax fraction of that portion of the amount written off as a bad debt as the cash price bears to the total amount payable under the hire purchase agreement or, as the case may be, the financial lease.