scholarly journals A Comparison Between the Modalities of Interpreting Tax Legislation Applied in South Africa and Australia

2018 ◽  
Author(s):  
Fareed Moosa
Keyword(s):  
South Africa ◽  
Tax Legislation

scholarly journals A Framework For The Income Tax Deductibility Of Intellectual Property Expenditure Incurred By South African Taxpayers

2013 ◽  
Vol 12 (3) ◽  
pp. 373
Author(s):  
Rudi Oosthuizen
Keyword(s):  
South Africa ◽  
Intellectual Property ◽  
South African ◽  
Income Tax ◽  
Case Law ◽  
Recent Case ◽  
Tax Legislation ◽  
Tax Deductions ◽  
The Right ◽  
The Cost

Taxpayers who use intellectual property (such as patents and trademarks) in their trade in the production of income may obtain the right of such use in a number of different ways. The nature of the transaction granting the taxpayer the use of intellectual property items determines the tax treatment thereof. Taxpayers may be able to claim deductions for the cost of using these items in terms of specific income tax sections or the general deduction formula as outlined by the Income Tax Act 58 of 1962. There are also a number of other sections in the Act which may affect the timing and extent of the deductions allowed. This article investigates the various income tax deductions which may be available to taxpayers in South Africa who make payments in respect of intellectual property. It considers the effect of important recent case law and changes to tax legislation on the timing and extent of these deductions and suggests a framework which can be applied to assist the taxpayer in understanding the structure of such deductions.

scholarly journals The Taxation of Company Distributions in Respect of Hybrid Instruments in South Africa: Lessons from Australia and Canada

2021 ◽  
Vol 24 ◽  
pp. 1-36
Author(s):  
Liezel G Tredoux ◽  
Kathleen Van der Linde
Keyword(s):  
South Africa ◽  
South African ◽  
Tax Avoidance ◽  
The South ◽  
Profit Shifting ◽  
Tax Base ◽  
Tax Legislation ◽  
Unlimited Time ◽  
Hybrid Instruments ◽  
Returns On Investment

Tax legislation traditionally distinguishes between returns on investment paid on equity and debt instruments. In the main, returns on debt instruments (interest payments) are deductible for the paying company, while distributions on equity instruments (dividends) are not. This difference in taxation can be exploited using hybrid instruments and often leads to a debt bias in investment patterns. South Africa, Australia and Canada have specific rules designed to prevent the circumvention of tax liability when company distributions are made in respect of hybrid instruments. In principle, Australia and Canada apply a more robust approach to prevent tax avoidance and also tend to include a wider range of transactions, as well as an unlimited time period in their regulation of the taxation of distributions on hybrid instruments. In addition to the anti-avoidance function, a strong incentive is created for taxpayers in Australia and Canada to invest in equity instruments as opposed to debt. This article suggests that South Africa should align certain principles in its specific rules regulating hybrid instruments with those in Australia and Canada to ensure optimal functionality of the South African tax legislation. The strengthening of domestic tax law will protect the South African tax base against base erosion and profit shifting through the use of hybrid instruments.

scholarly journals Tax risk-management analysis: Comparison between the United States of America, the United Kingdom and South Africa

2014 ◽  
Vol 7 (2) ◽  
pp. 375-392 ◽  
Author(s):  
Talya Segal ◽  
Warren Maroun
Keyword(s):  
United States ◽  
South Africa ◽  
Risk Management ◽  
United Kingdom ◽  
Portfolio Management ◽  
United States Of America ◽  
The United States ◽  
Tax Legislation ◽  
The United Kingdom ◽  
Policies And Procedures

Tax risk-management (TRM) is a little-studied area of corporate governance, despite the proliferation of ever more complex tax legislation that can have a material impact on the sustainability of organisations. In this light, the aim of this research is to explore policies and procedures relied on by tax authorities in the United States of America, the United Kingdom and South Africa to encourage a culture of compliance with tax laws. For this purpose, the research differentiates between specific and generic tax risks. These include transaction, operational, compliance, financial accounting, portfolio, management and reputation risk. The study highlights how each TRM-related policy or programme addresses these tax risks and compares the TRM systems in the three jurisdictions.

scholarly journals Tax preferences, dividends and lobbying for maximum value

2017 ◽  
Vol 20 (1) ◽  
Author(s):  
Wessel M. Badenhorst
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Dividend Policy ◽  
Policy Decisions ◽  
Tax Legislation ◽  
Dividend Policies ◽  
Maximum Value ◽  
Conflicting Interests ◽  
Corporate Investors ◽  
Dividend Tax

Background: The value of equity investments depends to some extent on the tax consequences for investors. When groups of investors have different tax preferences, this can lead to conflicting pressures on firms to either retain earnings or pay dividends. The findings of this study will be of interest to researchers of taxation and corporate governance alike, as they highlight the role that corporate shareholders play in the decisions of the firm. Investors and regulators will also be interested in the findings as they reveal more about the interaction between shareholders with conflicting interests. Lastly, changes in behaviour as a result of changes in tax legislation are of interest to those with fiscal responsibility.Setting: A 2012 dividend tax change in South Africa, which simultaneously altered the tax preferences of individual and corporate investors, provides a unique opportunity to investigate firms’ reaction to their investors’ tax preferences.Aim: This article seeks to determine whether firms respond to changes in their investors’ tax preferences in their decisions to either retain earnings or pay dividends.Method: The article investigates the responses of firms to the 2012 dividend tax change using multivariate regressions.Results: Findings show that firms consider changes in the tax preferences of their investors in setting dividend policies. In addition, it appears that corporates have greater success in lobbying for beneficial dividend changes than individuals.Conclusion: Changes in investors’ tax preferences impact on firms’ dividend policy decisions. These decisions ultimately affect the value of the firm to its investors

scholarly journals Should Uber drivers be considered employees for South African income tax purposes?

2021 ◽  
Vol 14 (1) ◽  
Author(s):  
Mariam Hussein ◽  
Shaun Parsons ◽  
Riyaan Mabutha ◽  
Magdel Zietsman
Keyword(s):  
South Africa ◽  
South African ◽  
Business Models ◽  
New Technologies ◽  
The United States ◽  
Tax Collection ◽  
Independent Contractors ◽  
Tax Legislation ◽  
Gig Economy ◽  
The Usa

Orientation: Uber is a leader in the gig economy both internationally and in South Africa. One of the key elements of Uber’s business model is that drivers operate as independent contractors rather than employees. Whilst this may reduce costs, it may also negatively affect tax collection.Research purpose: This study considers whether Uber drivers should be classified as employees or independent contractors in South Africa for employees’ tax purposes.Motivation for the study: As the gig economy expands, uncertainty exists as to how traditional approaches to taxation apply and the extent to which they remain appropriate to new business models that have non-traditional relationships with their participants. This is evident by the extent of disputes arising internationally, and particularly in the United States of America (USA), where Uber was founded.Research approach/design and method: This study engages in comparative legal research to determine the extent to which attempts to resolve this question in the USA may inform the South African context.Main findings: The lack of consistent classification outcomes in the USA suggests that it may be difficult to reach a conclusive classification of Uber drivers in South Africa for employees’ tax purposes using the current tests. Whilst these tests may be adapted, this study supports calls for rethinking the link between tax collection and traditional employment relationships.Contribution/value-add: This study contributes to the development and interpretation of South African tax legislation in the context of new technologies and business models, and provides recommendations for rethinking the approach to tax collection in these contexts.

scholarly journals An Evaluation Of Income Tax Incentives Available To The South African Oil And Gas Industry

2016 ◽  
Vol 15 (5) ◽  
pp. 227-240 ◽  
Author(s):  
Anneke Maré Moolman ◽  
Pieter Van der Zwan
Keyword(s):  
South Africa ◽  
Income Tax ◽  
Oil And Gas ◽  
Oil And Gas Industry ◽  
Tax Incentives ◽  
International Investment ◽  
Apparent Lack ◽  
Tax Legislation ◽  
The Impact ◽  
Oil And Gas Sector

The oil and gas sector is advantageous to South Africa. However, the country’s oil and gas reserves are minimal in relation to many other countries, reducing attractiveness to prospective investors. In the aim of promoting investment in the oil and gas sector of South Africa, attraction should be improved by other means, such as an alluring regulatory environment, including the taxation regime.The research conducted in this study aimed to determine whether the income tax legislation in South Africa provides a meaningful incentive for oil and gas companies to compete for international investment in this industry without unnecessarily compromising the State’s share of wealth from the industry. A literature review established the use and characteristics of meaningful tax incentives. The incentives contained in South Africa’s oil and gas tax environment were evaluated to determine whether the incentives can attract investment to the sector.Findings indicate that the incentive contained in the Tenth Schedule generally meets identified characteristics of meaningful tax incentives, enabling South Africa to lure investment to the sector. The interaction between this incentive and the remainder of the legislation, however, reduces the stability afforded to investors and may create uncertainty in the application of the incentive. Also, an apparent lack of monitoring of the regime may result in the impact and necessity of the incentive not being determinable, especially if the investor environment were to be affected by new discoveries.

The intersection between taxation and insolvency — The South African Revenue Service’s preference

2021 ◽  
Vol 138 (4) ◽  
pp. 799-817
Author(s):  
Carika Fritz ◽  
Thabo Legwaila
Keyword(s):  
South Africa ◽  
United Kingdom ◽  
South African ◽  
Tax Administration ◽  
The South ◽  
Tax Legislation ◽  
The United Kingdom

When a debtor’s estate is sequestrated or an insolvent company is wound up, insolvency and taxation intersect whenever the debtor or company has an outstanding tax debt. This article considers whether the South African Revenue Service should, or could, be provided with a better standing in cases of insolvency. From a comparison of the situations in South Africa, Mauritius, Australia and the United Kingdom, it is clear that South Africa’s approach of determining the order of distribution in relation to tax claims based on the type of tax is in line with the approaches of Mauritius and the United Kingdom. However, s 179 of the Tax Administration Act and ss 114 and 147(1) of the Customs and Excise Act may have an impact on a claim by the South African Revenue Service in the event of insolvency. In this respect, we argue that, in instances where a taxpayer is sequestrated or wound up due to insolvency, the Insolvency Act and the Companies Act should take precedence. Since the Insolvency Act provides for a clear order of distribution both in respect of the insolvent estates of natural persons and when an insolvent company is wound up, tax legislation in South Africa should not be used to deviate from this order of distribution.

scholarly journals An evaluation of interest deduction limitations to counter base erosion in South Africa

2018 ◽  
Vol 21 (1) ◽  
Author(s):  
Pieter Van der Zwan ◽  
Daniel P. Schutte ◽  
Waldo Krugell
Keyword(s):  
South Africa ◽  
South African ◽  
Income Tax ◽  
The South ◽  
Profit Shifting ◽  
Present Evidence ◽  
Tax Legislation ◽  
Tax Returns ◽  
The Mean ◽  
Using Data

Background: The Organisation for Economic Cooperation and Development (OECD) made a number of recommendations in relation to interest deduction limitations as part of the Base Erosion and Profit Shifting (BEPS) project. In 2016 the South African National Treasury indicated that the interest deduction limitations contained in the Income Tax Act would be reviewed in the light of these recommendations. Aim: This paper aimed to describe funding structures of companies in South Africa liable for tax and how this relates to other characteristics, including ownership, of the companies. Setting: The research was performed using data from tax returns submitted by companies liable for income tax in South Africa. Methods: This paper reports on descriptive analyses of the research conducted. Results: The results showed that the mean interest-to-earnings before interest, taxes, depreciation, and amortisation (EBITDA) ratio for certain foreign-owned entities differed significantly from that of domestically owned entities. Conclusion: The results may present evidence of profit-shifting activities. They also highlight trends in interest-to-EBITDA ratios that may be of relevance for future legislative developments. Further related research is required if interest deduction limitations in the South African tax legislation are to be reviewed in light of the OECD proposals.

Time and Latitude in South Africa

1972 ◽  
Vol 1 ◽  
pp. 27-38
Author(s):  
J. Hers
Keyword(s):  
South Africa ◽  
Cape Town ◽  
Astronomical Observations ◽  
Royal Observatory ◽  
The Republic ◽  
Astronomical Determination ◽  
Limited Accuracy ◽  
Better Than

In South Africa the modern outlook towards time may be said to have started in 1948. Both the two major observatories, The Royal Observatory in Cape Town and the Union Observatory (now known as the Republic Observatory) in Johannesburg had, of course, been involved in the astronomical determination of time almost from their inception, and the Johannesburg Observatory has been responsible for the official time of South Africa since 1908. However the pendulum clocks then in use could not be relied on to provide an accuracy better than about 1/10 second, which was of the same order as that of the astronomical observations. It is doubtful if much use was made of even this limited accuracy outside the two observatories, and although there may – occasionally have been a demand for more accurate time, it was certainly not voiced.

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