OpenUCT :: Browsing by Subject "Tax"

Browsing by Subject "Tax"

Now showing 1 - 15 of 15

Open Access
A comparative analysis of the South African and Australian general tax avoidance enactments
(1998) Aucamp, Johan Louis; Emslie, Trevor
From a tax planning perspective, it is important to take note of the general trend of the developments in anti-tax avoidance provisions and the manner in which they are interpreted by the Supreme Court. From an international perspective it is important to take cognizance of the fact that internationally, a flurry of tax avoidance provisions are being promulgated to curtail the increasing efforts of taxpayers to avoid the effect of harsh tax measures being taken by different authorities.
Open Access
Domestic deeming provisions and double tax treaties: lessons from Tradehold and Fowler
(2025) Davidson, Bronwyn; Johnson, Tracy
This thesis examines the complex interaction between domestic deeming provisions in South African domestic tax law and double tax treaties (‘DTTs'), focusing on the legal and interpretative challenges that arise when statutory fictions are applied within an international tax framework. Using a comparative analysis of Commissioner for the South African Revenue Service v Tradehold Ltd (‘Tradehold') and Fowler v HMRC (‘Fowler'), the research investigates whether South African courts' reasoning in Tradehold could have been influenced by the approach taken in Fowler. The thesis explores whether key judicial principles or other factors justify the different outcomes in the cases or if the uncertainties in interpretation highlight the need for more explicit guidance. By assessing the principles governing the application of DTTs where domestic tax law incorporates statutory fictions, this research aims to contribute to a more structured and predictable approach to resolving cross-border tax disputes. Research Methodology: A doctrinal legal research approach is employed, drawing on legislative analysis, case law, and academic commentary. The thesis applies comparative legal analysis to examine the South African and United Kingdom (‘UK') courts' reasoning in Tradehold and Fowler, evaluating how statutory deeming provisions interact with DTT principles. Particular attention is paid to purposive interpretation as applied by the courts, assessing whether South Africa's approach aligns with international best practices. The research also explores broader interpretative frameworks, including the role of the Vienna Convention on the Law of Treaties and Organisation for Economic Co-operation and Development (‘OECD') Model Tax Convention principles, to assess their impact on the resolution of tax treaty disputes. Results and Conclusions The findings illustrate the South African courts in Tradehold adopted an approach that sought to retain the domestic statutory fiction within the DTT provisions, whereas the UK courts in Fowler limited the influence of the domestic deeming provision in favour of treaty autonomy and did not retain the fiction created by the deeming provision. This divergence underscores the absence of a universal standard for interpreting DTT provisions when domestic law incorporates statutory fictions. The analysis highlights the risks of inconsistent application, including double taxation or double non-taxation, which could undermine DTT objectives. This thesis concludes that clearer legislative and judicial frameworks are needed to ensure predictability and equity in tax treaty interpretation. It recommends that South African tax authorities provide more explicit guidance on the treatment of deeming provisions in an international tax context to enhance certainty for taxpayers and tax practitioners alike. To mitigate the inconsistencies highlighted in this thesis, it is recommended that South African Revenue Service issues binding guidance on the interpretation of deeming provisions within the context of DTTs. This could take the form of interpretative notes, similar to the OECD Commentary, which clarify when statutory fictions should be retained under DTTs and when they should not. Additionally, legislative amendments should be considered to ensure alignment between South Africa's domestic framework and international treaty obligations, particularly to prevent scenarios of double non-taxation or unintended fiscal arbitrage.
Open Access
An enquiry into the factors affecting the development of the South African tax structure (1946/47-1985/86)
(1987) Wainer, Graham D; Rees, David J
The objective of this thesis is the provision of explanations for the changes in the South African tax structure between 1946 and 1985. The method of enquiry comprises an evaluation of three theoretical perspectives evident in the literature, referred to throughout as the economic development, public choice and marxist approaches. The central conclusion to emerge from this study is that whilst each of these perspectives individually provides valuable insights, by far the most structured explanation relies on an eclectic exposition which incorporates the relevant contributions of all three approaches.
Open Access
International tax planning and anti-tax avoidance provisions - Hila Zetler.
(2013) Zetler, Hila; Emslie, Trevor
'The avoidance of tax may be lawful, but it is not yet a virtue' – Lord Denning¹. The famous English judge, Lord Denning, explained that the avoidance of tax may be legal, but it is not necessarily ethical. By said words, Justice Denning implied that, when a taxpayer avoids paying taxes through legal tax planning, he may, despite the ostensible legality thereof, nevertheless harm society. Assuming that such action does, indeed, involve an immoral act, should the legislature intervene?
Open Access
Is the time now ripe for South Africa to introduce a formal group tax system?
(2025) Joubert, Jacobus; Tickle, Deborah
The possible introduction of a group tax regime in South Africa has for some time been the subject of debate. In its third interim report the Katz commission recommended that South Africa employ a consolidation method of group taxation, this same method of group taxation was also proposed by the Davis Tax committee (“DTC”). Despite the proposal and other findings suggesting South Africa should adopt a group tax regime, the reality is that South Africa is yet to adopt this regime, but rather resorted to an interim regime, being the corporate rules currently employed. The dissertation addresses the crucial question of whether the time is now ripe for South Africa to adopt a formal group tax system, emphasizing the necessity for mutual benefit to both the fiscus and taxpayers. An examination of the existing corporate rules reveals their shortcomings and inability to deliver intended relief, prompting consideration of a group tax system as a viable alternative, indicating that the possibility of a group tax system should be investigated. A group tax system deems members of the same corporate group to be the same person for tax purposes. Group tax aligns with economic reality of groups whereby the companies within them are managed towards the greater good of the group and not the company itself. A system of group taxation strongly aligns with the single entity principle and achieves the objective policies of a good tax system. The Margo Commission, Katz Commission, and DTC, all support the finding that there are potentially significant benefits of a group tax system for South Africa. The major concern related to the introduction to group tax in South Africa remains SARS's ability to effectively implement and maintain it. It is submitted that SARS has made great strides in recent years and that the potential benefits of a group tax system should not be neglected. The conclusion is reached that the time is now ripe to introduce a group tax system to South Africa.
Open Access
Media Coverage and the Cross Section of Stock Returns A Probe into the JSE
(2019) Modise, Kagiso Eagile; West, Darron
Through reaching a wide-ranging population of investors, both institutional and individual, mass media coverage of stocks markets can alleviate financial information frictions and consequently affect the valuation of securities even when it does not present genuine news. The empirical objective of this research is to investigate this hypothesis by studying media reporting and changes in average stock returns. By constructing two portfolios of stocks divided into “stocks without media coverage” and “stocks with media coverage” an investigation can be carried to find out which portfolio outperforms the other and sometimes even after accounting for risk factors. Previous literature news media and the stock market has failed to address African financial markets including the Johannesburg stock exchange (JSE) market. The Johannesburg stock exchange is Africa’s oldest and largest stock market. An opportunity exists to replicate empirical work on news media reporting and changes in average returns in South Africa and Johannesburg stock exchange. The methodology employed in this study is adopted from the widespread research previously conducted in other more developed markets. Media coverage has been derived from the number of headline articles about a stock in a certain month in 23 influential South African print newspapers. Only headline articles are used to proxy for a stocks overall media attention. A systematic search of the LexisNexis database is carried out to find articles published in 23 major, influential newspapers in South Africa. The examination period is from 1 January 2013 to 31 December 2017 (a total of 7620 firm-month observations). The results indicate no statistically significant (at the 95% confidence level) outperformance of stocks without any news media reporting over stocks with news media reporting as found in more developed markets. Further analysis of data indicates that media reporting of the JSE stocks is surprisingly low and 99% of observations having only 6 headlines or less in the media. Therefore, about 1% of the observations are reported at least 7 times in the South African newspaper media.
Open Access
Sectoral dynamics of financial co-integration between BRICS and developed stock markets
(2019) Lima, Roland Nubiga; Toerien, Francois
This study examines the sectoral dynamics of co-integration between the BRICS (Brazil, Russia, India China and South Africa) and developed stock markets, represented by Germany, Japan, the UK and the US, during the four phases of the Global Financial Crisis (GFC), the three phases of the European Sovereign Debt Crisis (ESDC) and the UK Brexit crisis. The sample includes daily sectoral equity indices over the period January 2006 to December 2017. The study applies the ADCC GJRGARCH model to estimate the time-varying correlations across the nine countries within each sector and across sectors within each country, and assesses the conditional correlation dynamics during each of the phases of the three crisis periods. The results support the existence of financial co-integration across sectors and among all the nine countries during the GFC and ESDC. Only developed countries exhibit co-integration during the UK Brexit crisis. While some sectors were less affected during some of the crisis periods, on average, financials were the most affected during the GFC, ESDC and UK Brexit crisis. Further analysis on a crisis phase level reveals that most country pairs and sector pairs exhibit significant increases in conditional correlations in phase two of the GFC and ESDC, limiting the effectiveness of international diversification during this period. The results provide useful insights for policy makers and investors.
Open Access
Should SA Pursue The Two-Pillar Solution In Terms Of Missing Digital Revenues In Lieu Of The Digital Services Tax?
(2023) May, Steven; West, Craig
The 1920s compromise to tax source revenues appears obsolete in the 21st century.1 The digitalization of modern economies has resulted in outdated tax laws. Brick-and-mortar type principles are still applied to determine revenue sources, whereas, in the digital age, many businesses have no physical presence that would otherwise allow states to tax profits of large multinational enterprises (MNEs) deemed to operate within their borders. While the world sought a consensus-based approach to deal with the issues, the Organisation for Economic Co-Operation and Development (OECD) introduced an interim solution – a Digital Services Tax (DST). The DST drew criticism from certain countries, as it is believed to target multinational companies unfairly. The OECD finally achieved worldwide consensus with the signing of the Two-Pillar Solution in 2021, which is to become effective in 2023; however, the signatories of the Two-Pillar Solution also committed themselves to abolish DSTs and refrain from developing any similar types of taxes. While most countries have agreed to the Two-Pillar Solution, some countries have not, including African Tax Administration Act (ATAF) member Kenya. Kenya indicated that its DST provides certainty and assures tax revenues whereas the Two-Pillar Solution's outcome remains uncertain, and the tax revenues are unclear. In addition, ATAF raised concern that the 15% global minimum tax rate proposed is too low for developing African countries and suggests such a threshold will continue to allow MNEs to avoid paying tax in African states. This dissertation will evaluate whether or not DST is a better option for SA rather than the Two-Pillar Solution. If not, are there other ways SA could recover missing digital tax revenues? Like Kenya, SA also has to consider the global minimum tax rate.
Open Access
Tax planning in the light of tax avoidance provisions in the South African income tax Act Section 103- as amended in the income tax Act No 36 of 1996
(1997) Letete, Puseletso Idleatte
The first question that comes to one's mind, in dealing with question of tax planning and tax avoidance is, what is tax planning? What is its significance in the economy of each particular country? How does it affect every taxpayer and what consequences does it have for the Receiver of Revenue? Every country has got its own system of taxation, depending on the prevailing socio-economic factors. For example, one would not expect that the system of tax existing in the Republic of South Africa would be similar to the one existing in the Kingdom of Lesotho. This difference is brought by the fact that South Africa is a bigger country, with a larger economy. Therefore, the system of tax would be more complex than the one existing in Lesotho. However, one is not suggesting that the size of the country is the determining factor. The determining factor might be related to the economy of each country.
Open Access
"The assessed loss as the driving force behind schemes of arrangement and compromises under s 311 of the Companies Act 61, 1973, as amended"
(1999) Maloka, Tumo Charles
The desire of virtually all taxpayers today is to find some means of minimizing their taxes. The search for tax shelters by taxpayers is relentless. Tax considerations are hallmarks of scheme of arrangements and compromise carried out in terms of s3 11 of the Companies Act. The scheme of arrangements gained popularity during the sanctions era as a tax saving device. Broadly speaking, s311 schemes have been employed as a relatively inexpensive method of acquiring financially distressed company being wound up with one of the most alluring commodities from tax point of view - a large balance of assessed loss to generate tax-sheltered income. The retention of assessed loss is paramount concern of proposers of s 311 scheme of arrangements and compromise with creditors. It is, therefore, a matter of considerable import that an insolvent company's assessed loss remain largely intact. And when it comes to structuring an arrangement or compromise, the choice of scheme is even more crucial especially if the objective is the set-off of assessed loss against current income. The assessed loss has been described as the leit motif behind the beneficial use of statutory corporate re-organization facilitated by s 3 11 of the Companies Act. To the extent that schemes of arrangements and compromise are used to obtain substantial tax savings, the taxpayers make very considerable inroads into the fiscus. As soon as one starts to engage in s3 l l schemes of arrangements and compromise, one is liable to draw bit of attention to trafficking in assessed losses of companies and to provoke the Commissioner of Inland Revenue into a counter-attack. The opportunity to get assessed loss set-off against income is governed by two complimentary provisions, namely, sections 20 and 103(2). Section 20(1) results in a forfeiture or sterilization of assessed where there was mercantile abstinence on the part of the company. While section 20(1)(a)(ii) provides that the balance of assessed loss shall be reduced by the amount or value of any benefit received by or accruing to a person resulting from a concession granted by or compromise made with his creditors whereby his liabilities to them have been extinguished, provided that such liabilities arose in the course of trade. Further disqualification is provided by s103(2) which is specifically aimed at restricting trafficking in assessed losses of companies. The tax efficacy of s311 schemes can be easily overshadowed by adverse tax treatment under aforementioned provisions.
Open Access
The Determinants of Non-Performing Loans: Evidence from African Banking Systems
(2022) Paul, Michael; Toerien, Francois
Historically, the evolution of NPLs across different regions has been relatively heterogenous, in part due to unique structural differences that comprise different banking sectors and the varying impact that certain macroeconomic conditions have on different countries' banking systems. This study empirically investigates the leading determinants of credit risk in the African context by employing the ARDL approach to cointegration on eight African countries: Egypt and Morocco (North African countries), Botswana and South Africa (Southern African countries), Kenya and Mauritius (East African countries), and Ghana and Nigeria (West African countries). Due to data availability and reliability concerns quarterly data is used in Egypt (Q1 2009 – Q4 2020), Morocco (Q1 2005 – Q4 2020), Botswana (Q1 2007 – Q4 2020), Kenya (Q1 2009 – Q4 2020), Mauritius (Q1 2009 – Q4 2020), Ghana (Q1 2008 – Q4 2020), and Nigeria (Q1 2010 – Q4 2020). Monthly data is used in South Africa (December 2012 – December 2020). The study aims to examine how certain macroeconomic and banking industry specific factors uniquely impact the accumulation of NPLs across different African regions. In addition, an external variable accounting for the implementation of IFRS 9 is introduced as a dummy variable. The findings indicate that macroeconomic factors are critical determinants of NPLs in the case of North African countries in both the long-run and short-run. As for the Southern African countries, NPL fluctuations are highly sensitive to banking industry-specific factors rather than macroeconomic factors. This indicates that NPLs in the Southern African banking systems are less vulnerable to adverse macro-financial shocks but rather more exposed to problems originating from the banking sector itself. In the case of the East and West African banking systems, NPLs are driven by banking industry-specific factors in the short-run but not in the long-run. Lastly, the findings indicate that the implementation of IFRS 9 has a decreasing effect on NPLs in both the short run and long run in the case of Egypt, South Africa, and Mauritius. As for Kenya, IFRS 9 seems only a critical determinant of NPLs in the long-run but not the short-run. Drawing on these results, this study recommends the promotion of a positive environment for economic growth in the case of North African countries, and the strengthening of banks' balance sheets in the case of the South, East, and West African countries.
Open Access
The fraud exception in international documentary credit transactions seen from an English and German perspective
(1999) Dankert, Oliver
This inquiry will investigate the extent to which fraudulent conduct affects the rules and principles of international documentary credit transactions particularly the issuing or confirming bank's legal position of vis a vis the beneficiary. The inquiry will be taken from the perspective of English and German law, with the main focus on that very important English case, United City Merchants v Royal Bank of Canada1. The legal • position of German law will be compared whether the German solution differs from that found by the House of Lords in United City Merchants v Royal Bank of Canada. Before examining this specific problem in the field of documentary credits, a short survey of the rules, principles and mechanism of documentary credits in international transaction will first be given.
Open Access
The taxation in South Africa of business profits of controlled foreign companies: in conflict with international law?
(2010) Marais, Retha; Gutuza, Tracy
The face of commerce has become progressively more globalised in the past decades, facilitated by among other factors, telecommunication improvements and the ease and speed of travel.1 An increasing number of South African companies are expanding their business internationally, and directly controlled foreign investment is increasing consistently.2 Whilst the economic activity generated by the global expansion of South African companies is positive, it creates a problem for the South African government, in that the flight of capital may erode the domestic tax base. To address this problem, South Africa replaced source-based taxation with residence-based taxation as of 1 January 2001, leading to the taxation of its residents' worldwide income.
Open Access
The taxation of 'Influencers' in South Africa and in an international context
(2025) Smith, Carla; Roeleveld, Jennifer
Social media has changed as a result of the digital economy's explosive expansion, turning it into a powerful tool for both individuals and businesses alike. Influencer marketing, a product of this digital era, has achieved remarkable success. With their dynamic and multifaceted lives, social media Influencers have become an integral part of the digital economy. However, existing international tax rules lack specific provisions addressing Influencers, raising questions about their tax treatment and the potential for treaty abuse. This underscores the necessity of exploring how the Influencers are to be taxed within the current legal frameworks, both from a local and international point of view. Following the introduction of fundamental concepts essential for understanding the activities and income generation means of Influencers, this document delves into an exploration of the local and international tax implications for these individuals. In the local context, an examination of current South African tax laws applicable to Influencers is undertaken. Additionally, in the international sphere, an in-depth analysis of their activities is conducted within the framework of the Organisation for Economic Co-operation and Development on Income and Capital Model Tax Convention (“OECD MTC”). Upon examination of the activities and income streams of Influencers from both a South African and international perspective, it became evident that their taxation is guided by existing legislation rather than specific provisions tailored for them. In South Africa, the classification of Influencers as employees or independent contractors holds crucial implications for their tax treatment. Notably, the taxation of promotional gifts, whether received for consideration or not, emerges as a critical aspect, subjecting Influencers to taxation due to their provision of marketing or advertising services. On the international front, existing rules, with the exception of the debate around Article 17 of the OECD MTC, are deemed sufficient for encompassing Influencer activities. The choice between Article 7 and Article 17 depends on the nature of the Influencer's activities. The various income streams of Influencers, from commission income to fees for services rendered and the sale of goods, fall within the scope of Article 7. The examination of Influencer activities under Article 17 is particularly relevant when they entertain followers through live social media posts. The conclusion underscores that Influencers face similar cross-border challenges as other taxpayers. Still, it emphasises the need for careful identification of their income streams to ensure proper application of double tax treaties and to avoid potential issues of double taxation or double non-taxation. The unique lifestyle of Influencers may lead to scenarios of double taxation, and them seeking visas in lower-tax jurisdictions since most of their income is subject to taxation in the Country where they are tax resident. The ongoing discussions regarding the taxation of Influencers are of crucial importance, particularly in light of evolving dynamics within the digital economy and their substantial potential for tax collection. This underscores the importance for Tax Authorities to provide clear guidance in navigating this intricate landscape for Influencers.
Open Access
The taxation of electronic commerce in South Africa
(1998) Buys, Christo Reinhardt; Emslie, Trevor
Much has been written on how the Internet affects legal issues, such as defamation and patent infringement, but substantial questions have yet to be answered in regard to how this new trade route will be treated by the various laws of taxation. Taxpayers conducting business electronically realise that they face not only the risk ~ of multiple taxation, but also the serious risk of new or increased taxes. 1 Tax authorities, on the other hand, believe that their tax bases are at risk of erosion because of what they perceive to be new administration and enforcement difficulties.

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