Definition of fair market value

(1) The “fair market value” of a supply of goods or services, including anything provided as in-kind consideration for another supply, is– (a) the consideration the supply would fetch in an open market transaction freely made between unrelated persons; or (b) if it is not possible to determine an amount under paragraph (a), the consideration a similar supply would fetch in an open market transaction freely made between unrelated persons, adjusted to take account of the differences between such supply and the actual supply; determined on the basis of the market conditions, including the registration status of the supplier, prevailing at the time and place of the actual supply. (2) For the purpose of sub-section (l)(b), one supply is similar to another if it is the same as, or closely resembles, the other supply in character, quality, quantity, functionality, materials, and reputation. (3) If the fair market value of a supply cannot be determined under sub-section (1), it may be determined using any method approved by the Commissioner for calculating an objective approximation of the consideration the supply would fetch in an open market transaction freely made between unrelated persons. (4) If a provision of this Act requires the fair market value to be determined for particular goods or services, or for an asset held by a person, that value is worked out under this section by reference to the value that a supply of those goods or services, or that asset, would fetch in a transaction freely made under appropriate market conditions.