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“Watch-dogs for an Economy” : a determination of the origins of the South African Public Accountants' and Auditors' Board – as the Regulator of the Profession – principally through an analysis of the debates and related reports to the House of Assembly of the Parliament of the Union of South Africa in the period 1913–1940

  • Authors: Lancaster, Jonathan Charles Swinburne
  • Date: 2014
  • Subjects: Public Accountants' and Auditors' Board (South Africa) , Accounting -- Law and legislation -- South Africa , Accounting -- South Africa -- History , Accounting -- Standards -- South Africa , South Africa -- Economic conditions -- 1918-1961 , South Africa -- Politics and government -- 1909-1948
  • Language: English
  • Type: Thesis , Doctoral , PhD
  • Identifier: vital:922 , http://hdl.handle.net/10962/d1020876
  • Description: This thesis concentrates upon a new field of research in South African accounting scholarship – this being, in general terms, accounting history and more specifically an analysis of the origins of the Public Accountants’ and Auditors’ Board as watch-dog in relation to: ● the South African economy in the period 1913–1940; and ● the changing political framework (also in the period 1913–1940). The integration of economy, politics and personal ambition on the part of early 20th Century accounting societies, led to a variety of responses, counter proposals, stalemates and unfocused activity which caused the process of accountants’ registration to extend over 38 years in South Africa. This confusion was in strong contrast to the process of speedy registration of accountants in New Zealand and Australia. The final unification of South African accounting societies in 1951 created the Public Accountants’ and Auditors’ Board. Its creation, at long last, suggested an overarching control and regulation which was mirrored in the final political unification and economic stability of a South Africa dominated by Afrikaner Nationalists. One further element was interwoven into the fabric of the thesis – this being the application of institutional economic theory and its impact upon the accounting concepts of “material irregularity” and “reportable irregularity”.
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  • Date Issued: 2014

Voluntary disclosure programmes and tax amnesties: an international appraisal

  • Authors: Jaramba, Toddy
  • Date: 2014
  • Subjects: Tax amnesty -- South Africa , Tax evasion -- South Africa , Investments, Foreign -- Taxation -- South Africa , Tax collection -- South Africa , Tax administration and procedure -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:911 , http://hdl.handle.net/10962/d1015666
  • Description: Tax amnesties are government programs that typically allow a short period of time for tax evaders to voluntarily repay previously evaded taxes without being subject to penalties and prosecution that discovery of such tax evasion normally brings. Tax amnesties differ widely in terms of coverage, tax types, and incentives offered. A state’s Voluntary Disclosure Programme is another avenue available to taxpayers to assist them in resolving their state tax delinquencies. This programme is an on-going programme as compared to a tax amnesty, which is there for a limited time period only. The main goal of the research was to describe the tax amnesty and the voluntary disclosure programmes in South Africa and to assess their advantages and disadvantages. This thesis also discussed another form of voluntary disclosure programme, referred to as an Offshore Voluntary Disclosure Programme, which allows taxpayers with unreported foreign bank accounts, and presumably unreported foreign income, to voluntarily disclose their affairs. The study found that, due to tax amnesties, Government raises more tax revenue not only in the short run from collecting overdue taxes but also by bringing former non-filers back into the tax system for the long run. It was also found that, initially short-run revenue brought in from overdue taxes will be positive for the first amnesty and then decline each time the amnesty is offered repeatedly. The reason for the decline in revenue might be that tax amnesties provide incentives for otherwise honest taxpayers to start evading taxes because they will anticipate the offering of future amnesties, thereby weakening tax compliance. The costs associated with amnesty programmes include negative long run revenue impact and also that amnesty programmes reduce compliance by taxpayers in the long-run. In South Africa tax amnesties, especially the voluntary disclosure programme, are likely to be successful since they will increase the revenue yield and also bring non-filers back on the tax rolls.
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  • Date Issued: 2014

Value and size investment strategies: evidence from the cross-section of returns in the South African equity market

  • Authors: Barnard, Kevin John
  • Date: 2013
  • Subjects: Financial risk -- South Africa , Saving and investment -- South Africa , Stock exchanges -- South Africa , Investments -- Psychological aspects , Investments -- Decision making , Value premium , Size effect , Rational finance , Behavioural finance , South African equity markets
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:874 , http://hdl.handle.net/10962/d1001606 , Financial risk -- South Africa , Saving and investment -- South Africa , Stock exchanges -- South Africa , Investments -- Psychological aspects , Investments -- Decision making
  • Description: Value and size related equity investment strategies are supported by a large body of empirical research that shows a persistent premium, both longitudinally and crosssectionally. However, the competing rational and behavioural finance explanations for the success of these strategies are a subject of debate. The rational explanation is that the premium earned on value shares or shares of small companies can be attributed to higher risk. Behaviouralists argue that such shares are not riskier and attribute the premium to cognitive errors and biases in human decision making. The purpose of this study is to determine, firstly, whether the value and size premium exist in South Africa during the period July 2006 to June 2012, which includes one of the worst equity market crises in history. Secondly, this study sets out to determine whether the premium earned on value and size strategies are adequately explained by the principles of rational finance theory. To provide evidence regarding the existence of the value premium and size effect, returns are analysed, cross-sectionally, on portfolios of shares sorted by value and size. For evidence of a rational explanation, returns are regressed on value and size variables, and the relative riskiness of value and small companies is analysed. The results show evidence of a value premium in portfolios of small companies, but not big companies. The size effect is found not to be statistically significant. While regressions do show significant relationships between value and size variables and returns, these variables are found not to be associated with higher levels of risk. The conclusion is that the evidence does not support a rational, risk based explanation of the returns
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  • Date Issued: 2013

Valuation of intellectual capital in South African companies: a comparative study of three valuation methods

  • Authors: Maree, Kevin W
  • Date: 2002
  • Subjects: Accounting
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:877 , http://hdl.handle.net/10962/d1001631
  • Description: This study discusses three valuation methods for intellectual capital and considers two of these (Tobin’s “q” and CIV) as suitable valuation methods.
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  • Date Issued: 2002

Transfer pricing: an analysis of legislation in the southern African Customs Union

  • Authors: Patel, Nabil Ahmed
  • Date: 2022-04-06
  • Subjects: Transfer pricing
  • Language: English
  • Type: Master's theses , text
  • Identifier: http://hdl.handle.net/10962/241482 , vital:50943
  • Description: Transfer pricing is defined as the setting of the price for goods sold and services rendered between related entities. For example, if a subsidiary company sells goods or renders services to its holding company or a sister company, the price charged is referred to as the transfer price. Transfer pricing can be used to manipulate profits and facilitate tax evasion. Therefore, it is important that countries enact transfer pricing legislation to prevent this. The United Nations (UN) and Organisation for Economic Co-operation and Development (OECD) guideline documents form the basis for most global legislation and conventions dealing with transfer pricing. The over-arching goal of this research was to investigate whether transfer pricing legislation in the Southern African Customs Union (SACU) aligns between SACU countries and with the OECD Guidelines and the UN Manual. The research applied a legal interpretive doctrinal research methodology and a qualitative research method. The data comprised primary legislation in the SACU countries, transfer pricing guidelines issued by revenue authorities in the SACU, OECD Guidelines, the UN Manual and journal articles. It was found in this study that certain aspects of transfer pricing legislation in the SACU are not fully aligned to each other and to the OECD Guidelines and the UN Manual. This study proposed recommendations to improve transfer pricing legislation in the SACU. These improvements include the introduction of transfer pricing legislation in Eswatini and Lesotho, and updating transfer pricing legislation in Namibia and South Africa in terms of the latest versions of the OECD Guidelines and the UN Manual. , Thesis (MCom) -- Faculty of Commerce, Accounting, 2022
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  • Date Issued: 2022-04-06

The valuation of amounts for the purpose of inclusion in gross income

  • Authors: Spearman, Tarryn Leigh
  • Date: 2012
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:887 , http://hdl.handle.net/10962/d1001641
  • Description: The present research investigates the valuation of amounts for the purpose of inclusion in gross income. Because the gross income definition in section 1 of the Income Tax Act includes "amounts in cash or otherwise", valuations are often required in order to establish a value in money terms for amounts received or accrued in a form otherwise than in cash. The basis on which these valuations are made can vary and the courts have frequently been called upon to decide on the correct method of valuation. There has been an ongoing debate in the courts as to whether a strict objective approach or a more flexible subjective approach should be adopted when valuing an amount in a form other than cash, which was finally settled in the decision by the Supreme Court of Appeal in CIR v Brummeria Renaissance (Pty) Ltd, which held that an objective approach must be followed. The present research will demonstrate how the strict rule of interpretation tends to result in purely objective valuations as it requires that the ordinary grammatical meaning of words be applied and does not allow the court to consider the purpose of the legislation or introduce any subjectivity based on the circumstances of each individual taxpayer and the facts of each particular case, which a purposive interpretation approach does. The purposive approach to interpretation is therefore more closely aligned with the subjective approach to valuation. Both the objective and subjective approaches to valuation have advantages and disadvantages, which are addressed in the research. The need for certainty in taxation was articulated as early as 1776 by Adam Smith in his Wealth of Nations. The objective approach appears to create a level of consistency as all income received by a taxpayer is effectively taxed as if received by a third party in an arm’s length transaction. The approach has led to unfair decisions at odds with economic reality and generally accepted accounting principles, which could be challenged on the basis of a lack of equity and fairness as required by the Constitution of the Republic of South Africa. The research demonstrates that an objective method of valuation is neither fully objective nor appropriate in certain circumstances, while a subjective approach may be more appropriate as it ensures that each taxpayer’s individual rights are protected. Although the subjective approach successfully addresses the issue of fairness, it threatens to introduce an unacceptable level of inconsistency and is, in reality, not always administratively feasible. The present research concludes that a trade-off between fairness and consistency is often necessary.
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  • Date Issued: 2012

The use of tax incentive measure in conjunction with carbon taxes to reduce greenhouse gas emissions and achieve economic growth: a comparative study with lessons for South Africa

  • Authors: Poole, Richard
  • Date: 2013
  • Subjects: Elasticity (Economics) , Substitution (Economics) , Carbon taxes , Carbon taxes -- South Africa , Greenhouse gas mitigation , Greenhouse gas mitigation--South Africa , United Nations Framework Convention on Climate Change -- (1992). Protocols, etc. -- 1997 Dec. 11 , Kyoto Protocol , Substitution elasticity
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:875 , http://hdl.handle.net/10962/d1001607 , Elasticity (Economics) , Substitution (Economics) , Carbon taxes , Carbon taxes -- South Africa , Greenhouse gas mitigation , Greenhouse gas mitigation--South Africa , United Nations Framework Convention on Climate Change -- (1992). Protocols, etc. -- 1997 Dec. 11
  • Description: In 1997 industrialized nations, the Third Conference of the Parties to the United Nations Framework Convention on Climate Change, met in Kyoto, Japan to sign a treaty (the “Kyoto Protocol”) in terms of which industrialized nations would be required to reduce their greenhouse gas emission by at least five percent below 1990 levels by the end of the “first commitment period” 2008-2012. South Africa is not regarded as an industrialized nation, but nonetheless acceded to the Kyoto Protocol in 2002. The literature reviewed in the present research reveals that, although idealistic, the Kyoto Protocol has been problematic. Fourteen meetings of the Conference of Parties to the Kyoto Protocol between 1997 and 2011 have achieved little more than to repeatedly defer and redefine Kyoto obligations. This research was undertaken to document the existing environmental taxation policies employed in selected international jurisdictions with a view to providing a framework for environmental tax policy formation in South Africa to assist this country in meeting its “greenhouse gas” emission targets, while at the same time promoting economic growth. A doctrinal research methodology was adopted in this study as it mainly analysed and interpreted legislation and policy documents and therefore the approach was qualitative in nature. An extensive literature survey was performed to document the various environmental policies that have been legislated in the selected jurisdictions. Comparisons were drawn with proposed tax policy measures for South Africa. The literature indicates that in the selected international jurisdictions carbon taxes achieved less-than-optimal results, largely due to political and industry-competitive agendas. With South Africa planning to introduce a carbon tax, it is submitted that the implementation of a carbon tax regime in isolation will be counter-productive, given South Africa’s economic profile. On the basis of the literature reviewed, it was concluded that South Africa should consider “recycling” carbon tax revenues within the economy to fund a broad-based tax incentive regime that will stimulate the change to non-carbon energy whilst promoting growth through sustainable development
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  • Date Issued: 2013

The taxation of the “sharing economy” in South Africa

  • Authors: Gumbo, Wadzanai Charisma
  • Date: 2019
  • Subjects: Corporations -- Taxation Taxation -- South Africa Value-added tax -- Law and legislation -- South Africa Double taxation -- South Africa Tax evasion -- South Africa Income tax -- Law and legislation -- South Africa Tax administration and procedure -- South Africa
  • Language: English
  • Type: text , Thesis , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/64045 , vital:28525
  • Description: The research examined whether the services provided by the “sharing economy” platforms are adequately dealt with by the current South African tax systems. In addressing this main goal, the research analysed how the South African tax systems deal with the income and expenses of Uber, Airbnb and their respective service providers. The research also investigated how South Africa could classify “sharing economy” workers and how this would affect the deductibility of the worker’s expenses. A brief analysis was made of the taxation of the “sharing economy” businesses in Australia and the United States of America. These countries have implemented measures to effectively deal with regulating the “sharing economy” businesses. An interpretative research approach was used to provide clarity on the matter. Documentary data used for the research consists of tax legislation, case law, textbooks, commentaries, journal articles and theses. The research concluded that the current taxation systems have loopholes that are allowing participants in the “sharing economy” to avoid paying tax in South Africa. The thesis recommends that the legislature could adopt certain measures applied in Australia and the United States of America to more effectively regulate “sharing economy” in South African and remedy the leakages the current tax systems suffer, causing SARS to lose potential revenue.
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  • Date Issued: 2019

The taxation of illegal income in South Africa: the basis on which proceeds from a unilateral taking should be taxed

  • Authors: Nyakanyanga, Kudzai Talent
  • Date: 2017
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/5960 , vital:21002
  • Description: In South Africa, income tax is levied in terms of the Income Tax Act, 58 of 1962, and the calculation of a taxpayer’s taxable income and ultimately the tax liability commences with considering what constitutes the taxpayer’s gross income. In terms of the definition of “gross income” a person can be taxed either on receipts or accruals. The definition makes no reference, however, to the legality of receipts or accruals. The main issue addressed in this thesis is the interpretation of the term “receipt” in relation to the proceeds from a unilateral taking (theft) and whether the concept of a receipt in relation to theft should be interpreted using the subjective approach used in MP Finance Group CC (In Liquidation) v C:SARS, or the objective approach. An interpretative research approach was used to provide clarity on the matter. The documentary data used for the research consists of South African tax legislation, case law, textbooks and journal articles. The thesis also analysed SARS’ view in Interpretation Note 80 that MP Finance Group CC (In Liquidation) v C:SARS is authority for a unilateral taking being a receipt, and the correctness of this viewpoint. A brief comparative analysis was done of the basis on which illegal income flowing from a unilateral taking is taxed in Australia, New Zealand and America. These countries have legislative provisions that specifically deal with how the proceeds from theft in the hands of a thief should be treated for tax purposes. The thesis concludes that, although the court in MP Finance Group CC (In Liquidation) v C:SARS shed some light on the issue of the taxability of income from illegal activities, the basis on which proceeds from theft may be taxed, as opposed to the basis on which proceeds from other illegal activities like fraud are taxed, remains a grey area in our law. The thesis recommends the introduction of a legislative provision in order to provide a more unified, consistent and effective approach when taxing all illegal income.
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  • Date Issued: 2017

The taxation of black economic empowerment transactions, with specific reference to the financial sector

  • Authors: Kamlana, Unathi
  • Date: 2006
  • Subjects: Black people -- South Africa -- Economic conditions , Business enterprises, Black -- Taxation -- South Africa , Employee empowerment -- South Africa , Income tax -- Law and legislation -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:896 , http://hdl.handle.net/10962/d1004544 , Black people -- South Africa -- Economic conditions , Business enterprises, Black -- Taxation -- South Africa , Employee empowerment -- South Africa , Income tax -- Law and legislation -- South Africa
  • Description: There has been some concern that the pace of expectations being built up regarding the transfer of ownership of the economy into the hands of the previously disadvantaged was not allowing for the due diligence and analysis of the implications of such transactions. Tax legislation relating to the transfer of assets is also not seen to be consistently conducive to this process. The focus of this thesis is taxation and a critical analysis of how the current tax legislation affects most of the transactions which usually form the basis of black economic empowerment. It is argued that tax policy is one of the fundamental instruments available to government to encourage the process of black economic empowerment. It is therefore important to assess whether or not current tax legislation is supportive of the process of black economic empowerment and to suggest ways in which it can be amended to serve this purpose. By means of a literature review and a case study of a Black Economic Empowerment deal in the financial sector, the thesis examines various sections of the Income Tax Act, 58 of 1962, which may have a bearing on black economic empowerment transactions and structures, including corporate restructuring rules, the taxation of trusts, inter-company loans, the use of hybrid financial instruments, the taxation of small business corporations, employee share incentive schemes, connected persons rules and value-shifting arrangements, the general deduction formula and the deductibility of interest incurred on amounts raised to acquire shares. It appears that although some aspects of the current tax legislation lend themselves to assisting black economic empowerment transactions, there are still areas where much improvement is required. , KMBT_363
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  • Date Issued: 2006

The tax treatment of receipts and accruals arising from equity option contracts

  • Authors: Doidge, Stephen
  • Date: 2013
  • Subjects: Derivative securities Options (Finance) Swaps (Finance) Income tax -- Law and legislation -- South Africa Taxation -- South Africa Futures
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:903 , http://hdl.handle.net/10962/d1007921
  • Description: In this thesis the tax treatment of equity option contracts is examined. The writer gives an overview of the derivatives market in general and discusses the nature and effect of equity options in detail. Limited amendments have been made to the South African Income Tax Act No 58 of 1962 ('the Act') since the emergence of derivative instruments and at present only three types of derivative instruments are recognised: forward exchange and option contracts relating to forward exchange, interest rate swaps based on notional capital amounts and option contracts. Other than section 241 of the Act which deems all receipts and accruals from foreign exchange contracts to be income, the other sections dealing with derivatives do not concern themselves with capital or revenue classification. Accordingly, the classification of receipts and accruals arising from an equity option transaction is generally governed by the ordinary principles of South African tax law with the added problem of there being limited South African case law applying these general prinCiples to such transactions. The research undertaken in this thesis results in the establishment of a framework designed to determine the classification as revenue or capital the receipts and accruals arising from equity option contracts. Speculating, trading and investing in equity options is examined with regard to the general principles of South African tax and available case law. Hedging transactions are analysed with specific reference to their exact nature as well as general tax principles and available case law. The analogy of Krugerrands is used to draw parallels with the tax treatment of receipts and accruals arising from equity options used for hedging purposes. Once the theoretical framework has been established for revenue or capital classification, the actual tax treatment of both revenue and capital receipts is examined with reference to the Act and issues such as the gross income definition, the general deduction formula, trading stock and timing provisions are analysed and applied to receipts and accruals arising from equity option transactions. The thesis concludes with a summary of the findings and recommendations are made based on the research conducted.
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  • Date Issued: 2013

The tax implications of non-resident sportspersons performing and earning an income in South Africa

  • Authors: Wessels, Jacques
  • Date: 2008
  • Subjects: South African Revenue Service , Sports -- Taxation -- Law and legislation -- South Africa , Taxation -- Law and legislation -- South Africa , Income tax -- Law and legislation -- South Africa , Income tax -- Foreign income , Income tax -- South Africa -- Foreign income , Withholding tax -- Law and legislation -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:893 , http://hdl.handle.net/10962/d1003719 , South African Revenue Service , Sports -- Taxation -- Law and legislation -- South Africa , Taxation -- Law and legislation -- South Africa , Income tax -- Law and legislation -- South Africa , Income tax -- Foreign income , Income tax -- South Africa -- Foreign income , Withholding tax -- Law and legislation -- South Africa
  • Description: As the number of non-resident sports persons competing in South Africa increases so does the need to tax them more effectively. It was for this reason that the South African legislature decided to insert Part IlIA into the Income Tax Act which regulates the taxation of non-resident sports persons in South Africa. The new tax on foreign sports persons, which came into effect during August 2006, is a withholding tax placing the onus upon the organizer of the event to withhold the tax portion of the payment to the non-resident sportsperson and pay it over to the revenue services. The rate of taxation has been set at 15 percent on all amounts received by or accruing to a foreign sportsperson. The question which the research addressed is whether this new tax will prove to be an effective tax, both from the point of view of its equity and the administration of the tax. In order to determine the impact of the new tax, it was compared to similar taxes implemented in the United Kingdom and Australia and also to other withholding taxes levied in South Africa. The new tax was also measured against a theoretical model for effectiveness, compared to the pre-August 2006 situation and to the taxation of resident sportsmen and women, using hypothetical examples. The major shortcomings of the new withholding tax are the uncertainty with regard to the intention of the legislature on matters such as the taxation of capital income versus revenue income, the question whether payments to support staff are included in the ambit of the new tax, the taxation of the award of assets in lieu of cash payments and the definition of a resident. A further area of concern is that the rate of taxation of 15 percent appears to be too low and creates horizontal inequity between the taxation of resident and non-resident sports persons. The new tax on non-resident sports persons may have its shortcomings but, depending upon the administrative and support structures put in place to deal with it, will be an effective tax. The rate at which the tax is levied could result in a less tax being collected than before but, with the reduced administrative cost of tax collection, the effective/statutory ratio of the tax could well be much higher than it was. This is a new tax in South Africa and certain initial problems are inevitable and will undoubtedly be solved as the administrators gain experience and as the case law governing this tax develops. , KMBT_363
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  • Date Issued: 2008

The tax consequences of income and expenses arising from illegal activities

  • Authors: Singh, Shalona
  • Date: 2018
  • Subjects: South Africa. Income Tax Act, 1962 , Income tax South Africa , Tax evasion South Africa , Taxation Law and legislation South Africa Criminal provisions , Crime Economic aspects South Africa
  • Language: English
  • Type: text , Thesis , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/59456 , vital:27609
  • Description: Income tax in South Africa is levied in terms of the Income Tax Act, 58 of 1962 (the South African Income Tax Act) on taxable income, which by definition, is arrived at by deducting from ''gross income" receipts and accruals that are exempt from tax as well as deductions and allowances provided for in the Act. The South African Income Tax Act provides no guidance with regard to the taxation of income and expenditure from illegal activities. In this mini thesis, case law and legislation is reviewed in an attempt to provide clarity on the tax consequences of income and expenses arising from illegal activities. An overview is provided of the taxation of income and expenditure in respect of illegal activities in the United States of America, Australia and New Zealand. Similarities are found between the American, Australian, New Zealand and South African tax regimes in relation to the taxation of income earned from illegal activities, but there appears to be more certainty in America, Australia and New Zealand with regard to the deduction of expenses arising from illegal activities. In South Africa, taxpayers earning income from ongoing illegal activities will, in principle, comply with the definition of “trade” as defined in section 1 of the South African Income Tax Act. However, this is contrary to the view of the South African Revenue Service that illegal activities do not meet the definition of “trade”, a viewpoint that may not hold if challenged in court. Recommendations are made for the amendment of the South African Income Tax Act to specifically provide for the inclusion in “gross income” of income from illegal activities and to prohibit the deduction of expenditure arising from illegal activities.
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  • Date Issued: 2018

The tax consequences of a contingent liability disposed of as part of the sale of a business as a going concern

  • Authors: Staude, Daylan
  • Date: 2015
  • Subjects: Sale of business enterprises -- Taxation -- South Africa , Sale of business enterprises -- Law and legislation -- South Africa , Tax deductions -- South Africa , Contingent liabilities (Accounting) -- Taxation -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:918 , http://hdl.handle.net/10962/d1017544
  • Description: The sale of an entity as a going concern has a number of tax consequences for both the purchaser and the seller. The tax deductibility of a contingent liability upon its transfer from the seller to the purchaser, where the selling price has been reduced by the value of the contingent liabilities transferred, remains uncertain following the decision in Ackermans Ltd v Commissioner for the South African Revenue Service. An expense is either deductible under a specific section of the Income Tax Act, 58 of 1962, or under the general expense provisions in terms of sections 11(a) and 23(g). The Act does not contain a specific section relating to contingent liabilities and therefore a contingent liability will need to be considered for deduction under these sections. The Act further disallows an expense as a deduction under section 23(e), where a reserve is created (for example a leave pay provision). This study analyses the tax deductibility of a contingent liability, where the contingent liability has been transferred from the seller to the purchaser in a sale of an entity as a going concern and the purchase price has been reduced to compensate for the transfer of the contingent liability. The deductibility of the contingent liability was first assessed in terms of the provisions of the Act (sections 11(a), 23(g) and 23(e)) and associated case law. The decision in the Ackermans case and its preceding Income Tax Case 1839 was then analysed in order to establish the principles arising from the decisions. Finally the proposals in the Draft Taxation Laws Amendment Bill, 2011, and the subsequent Discussion Document issued by the South African Revenue Service were discussed. The analysis revealed the continuing confusion surrounding the status quo, thus demonstrating the importance of legislative intervention to provide guidelines for taxpayers.
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  • Date Issued: 2015

The tax benefits available to investors in immovable property in South Africa

  • Authors: Baines, Daniel
  • Date: 2016
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/4026 , vital:20589
  • Description: The object of this thesis is to provide guidelines relating to the tax benefits that are available to investors in immovable property in South Africa. This was done by analysing the various sections of the Income Tax Act, as well as case law and South African Revenue Service guidelines that interpret these sections, which provide for expenditure which may be deducted by taxpayers from their income when conducting the trade of letting immovable property in order to reduce their overall tax liability. The thesis also includes a chapter dealing with the four different types of vehicles that taxpayers may use when investing in property. It was found that there are significant tax benefits available to investors in immovable property through the general deductions provided in terms of section 11(a) of the Act, as well as the specific deductions that the legislature has promulgated for investors in immovable property. It was also found that each of the four vehicles has its own advantages and that a taxpayer’s personal circumstances will dictate which of the vehicles will best suit his or her needs.
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  • Date Issued: 2016

The South African tax implications of ceasing to be resident

  • Authors: Walker, Anthony Howard
  • Date: 2017
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/5555 , vital:20941
  • Description: In the context of rapid globalisation, skilled South African employees and professionals are often attracted overseas to take up new work opportunities in foreign countries. This may cause these individuals no longer to be “ordinarily resident” in South Africa. At the same time, changes in modes of travel, information and communication channels could result in companies and trusts no longer being considered to be tax resident in South Africa, if the place of effective management for these entities is moved to a foreign country and a double taxation agreement between South Africa and that foreign country deems these entities to be exclusively resident in the foreign country. The objective of this thesis was to analyse the tax implications that could arise when a resident natural person, trust or company ceases to be a resident or when a Controlled Foreign Company (CFC) ceases to be a CFC. A detailed analysis of the “exit charge” in section 9H of the Income Tax Act was undertaken to understand its normal tax implications when a natural person, trust or company ceases to be a resident or a CFC ceases to be a CFC. This included an analysis of how a natural person, trust or company ceases to be resident or how a CFC ceases to be a CFC. It was found that certain normal tax principles consistently apply to when a natural person, trust or company ceases to be resident or a CFC ceases to be a CFC. At the same time, certain unique normal tax implications arise for trusts and CFCs since they are impacted by the special tax rules that apply to these entities. Furthermore in the case of a trust, a judicial precedent has established that the “exit charge” remains and is taxable in the trust. For CFCs, there is uncertainty as to whether the “exit charge” could arise when a shareholder ceases to be resident, which results in residents no longer holding more than 50% of the total participation or voting rights in that foreign company.
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  • Date Issued: 2017

The South African income tax implications of transactions entered into to earn points for a Broad- Based Black Economic Empowerment scorecard, with reference to a selection of structures

  • Authors: Jaga, Praksha
  • Date: 2021-04
  • Subjects: Black Economic Empowerment (Program : South Africa) , South Africa. Income Tax Act, 1962 , Income tax -- Law and legislation -- South Africa , Spendings tax -- South Africa , Tax deductions -- South Africa
  • Language: English
  • Type: thesis , text , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/177306 , vital:42808
  • Description: This thesis discussed the South African income tax implications, in terms of the Income Tax Act, No. 58 of 1962, arising from complying with Broad-Based Black Economic Empowerment requirements, and related principles established in case law. Various structures and transactions entered into for the purposes of earning points for the B-BBEE scorecard were identified. In the assessment of the deductibility of B-BBEE expenditure in terms of the preamble to section 11, section 11(a) and section 23(g) of the Act, it was highlighted that, in the South African economic environment, B-BBEE compliance represents a competitive advantage for entities. In addition, many South African organisations are required to comply with B-BBEE requirements for legal and regulatory purposes. The analysis of the deductibility of B-BBEE expenditure revealed that taxpayers that incur this expenditure would be carrying on a trade or commencing to do so. It was also concluded that B-BBEE expenditure is incurred in the production of income and would generally not be capital in nature, except in certain circumstances, in which case the Act provides certain allowances. Any deduction will only be allowed in the year of assessment in which the expenditure is actually incurred, or when the taxpayer incurs an unconditional legal obligation. This thesis explored several alternatives to achieve the requirements of the ownership element of B-BBEE and highlighted the income tax implications that arise because of these structures. It was also observed that there are a number of incentives in the Act that could be beneficial to taxpayers seeking to earn points for the remaining elements of the B-BBEE scorecard. A legal interpretive approach, in particular a doctrinal research methodology, was adopted in carrying out this research. This research concluded that the Act facilitates most of the B-BBEE transactions and structures, but due to the complex and sometimes uncertain nature of the tax consequences of B-BBEE transactions and structures, there is a need for further guidance in this area of tax law. , Thesis (MCom) -- Faculty of Commerce, Accounting, 2021
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  • Date Issued: 2021-04

The South African income tax implications of a Stokvel

  • Authors: Matshego, Katlego
  • Date: 2020
  • Subjects: Rotating credit associations -- South Africa. , Taxation -- South Africa , Tax deductions -- South Africa
  • Language: English
  • Type: text , Thesis , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/143094 , vital:38201
  • Description: The term “Stokvel” originates from the rotating cattle auctions of English settlers in the Eastern Cape during the nineteen century. A Stokvel is defined as a credit union where a group of people agree to contribute a fixed amount of money to a common pool and is referred to as a rotating savings and credit association, where the contributions to a fund are given in whole or in part to each member. The goal of the thesis was to determine the “gross income” implications of the fund and its members, as well the deductibility of their expenses. An interpretative research approach was used in the research as it sought to understand and describe. No interviews were conducted for this research and the data used for the research are publicly available. The tax implications of five different types of a Stokvel were considered in relation to the research goals through the application of legislation and case law principles. The study established that a collection burial society, where funds are contributed after death, does not beneficially receive funds and it is not entitled to any deductions. The same applies to the member of that society. A contributing burial society, where funds are contributed over time, beneficially receives funds, which are included in “gross income”, and qualifies for deductions. The receipt by the member is exempt and deductions are prohibited by section 23(f). An entertainment Stokvel does not receive the contributions on its own behalf and benefit. No deductions are available to it. However, the member beneficially receives the contributions from the Stokvel, which are included in “gross income”, and qualifies for deductions. A purchasing power group, where items are purchased on behalf of members, does not receive the funds beneficially and no deductions are available to it. The members simply receive the goods they have paid for. Lastly an investment Stokvel, which invests contributions for the members, beneficially receives contributions and qualifies for various deductions. The member receives the share of income from the Stokvel for his/her own benefit. However, no deductions are available in respect of contributions.
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  • Date Issued: 2020

The South African general anti-tax avoidance rule and lessons from the first world: a case law approach

  • Authors: Pidduck, Teresa Michelle Calvert
  • Date: 2018
  • Subjects: Tax evasion -- South Africa , Taxpayer compliance -- South Africa , Taxation -- Law and legislation -- South Africa , South Africa. Income Tax Act, 1962 , Taxation -- Law and legislation -- Australia , Taxation -- Law and legislation -- Canada , Tax evasion -- Law and legislation -- South Africa , General anti-avoidance rule (GAAR)
  • Language: English
  • Type: text , Thesis , Doctoral , PhD
  • Identifier: http://hdl.handle.net/10962/60328 , vital:27768
  • Description: Tax avoidance has been a concern to revenue authorities since the time that the concept of tax was first introduced. Revenue authorities worldwide constantly strive to ensure taxpayer compliance, while combating impermissible tax avoidance. South Africa uses a general anti-avoidance rule (GAAR) as part of its arsenal to combat the increasingly innovative ways in which taxpayers seek to minimise their tax. However, the GAAR has been the source of much criticism and its effectiveness in combatting impermissible tax avoidance is untested in the courts. Therefore, the use of hindsight to criticise the GAAR is not possible. This study applied a qualitative approach to compare the South African, Australian and Canadian GAARs in order to propose changes which are intended to improve the efficacy of the South African GAAR. This research was performed by first comparing the three GAARs using a doctrinal research methodology and then applying the South African GAAR to the facts of selected cases from Australia and Canada in the form of reform-oriented research. In order to apply the South African GAAR to the facts of the cases a framework was developed in phase 1 of the research in order to ensure consistency in the application. This allowed for a more reliable analysis to be made regarding the areas where the South African GAAR could be improved. The convergence of results from the two research methodologies validated many of the suggestions made for the improvement of the South African GAAR This thesis examined the GAARs in South Africa, Australia and Canada with a view to identifying if there are any lessons to be learned for their application and interpretation, in order to suggest improvements which can be made to the South African GAAR. Further, relevant Australian and Canadian case law was found to be instructive as to the approach that could be adopted for purposes of applying the South African GAAR. The findings of the research revealed that while the South African, Australian and Canadian GAARs differ in their structure, each is directed to achieve the same end. The results of the study identified two types of improvements to the South African GAAR. Firstly, the South African GAAR should be consolidated into a three-part enquiry instead of the current four-part enquiry. In doing so the tainted elements (previously the abnormality requirement) could be used to inform an objective test of purpose. Secondly, guidance on areas of uncertainty regarding the application of the South African GAAR needs to be provided in order to prevent possible inconsistent judicial interpretations that may limit the efficacy of the GAAR whilst still protecting the right for taxpayers to legitimately minimise their tax burdens. One additional cause for concern highlighted in this research is the use of provisions from other jurisdictions without guidance on the application in the South African context. The use of similar provisions to that of its much-criticised predecessor has also introduced areas of uncertainty regarding the application of the South African GAAR. These areas of weakness and uncertainty arguably prevent the South African GAAR from being an effective deterrent to tax avoidance and many could be addressed by the legislature.
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  • Date Issued: 2018

The regulation of tax practitioners in South Africa: a proposed model

  • Authors: Woodbridge, Taryn
  • Date: 2006
  • Subjects: Income tax -- Law and legislation -- South Africa , Taxation -- Law and legislation -- South Africa , South African Revenue Service
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:891 , http://hdl.handle.net/10962/d1003128 , Income tax -- Law and legislation -- South Africa , Taxation -- Law and legislation -- South Africa , South African Revenue Service
  • Description: Tax practitioners in South Africa have been operating in an unregulated tax industry. This has allowed certain tax practitioners to fail in their duties to their clients, as many do not have to abide by any code of conduct or ethical principles, to the detriment of the public. Other than the provisions in the Income Tax Act, 58 of 1962, there has been no regulation. As a result of losses suffered by taxpayers either through the incompetence, ignorance or negligence of a tax practitioner, as substantiated by case law, and increased costs borne by the South African Revenue Services due to unnecessary queries and tax disputes, the Minister of Finance, Trevor Manuel, introduced the concept of tax industry regulation in his Budget Speech in 2002. This resulted in the introduction of section 67 A into the Income Tax Act, providing for a registration process for tax practitioners. All practising tax practitioners were required to register with the Commissioner for the South African Revenue Services by 30 June 2005. In addition, a discussion paper was issued in 2002 setting out the proposal of the Revenue Services to regulate the tax industry through the formation of an Association of Tax Practitioners. This proposal includes various contentious issues and casts significant doubt on whether the proposed model is the most suitable. The goal of the research was therefore to evaluate the current status of tax advisory services in order to demonstrate the need for regulation and to compare the proposed SARS model with two established regulatory authorities: the Estate Agency Affairs Board and the Australian Tax Agents Board. A conceptual model for regulation was developed in order to test all the models against a simple regulatory framework to determine whether each was aligned to certain best practices proposed in this framework. The research methodology was qualitative in nature, involving the critical interpretation of documentary data and data generated during a public discussion forum of tax practitioners. It was concluded that the SARS proposal is too prescriptive and, at the same time, too broad in its scope. In order to address the key objective, identified as protection of the taxpaying public, a simplified regulation procedure was recommended, which would adhere to the proposed regulatory framework. , KMBT_363
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  • Date Issued: 2006
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