Simulation discussed : tax avoidance in the common law

Marais, Albertus Johannes

Simulation discussed : tax avoidance in the common law

Master Thesis

2012

Publisher

University of Cape Town

Department

Department of Commercial Law

Faculty

Faculty of Law

Abstract

The simulation doctrine has, in the law of taxation, always played the role of being SARS' remedy in the common law, vis-a-vis its legislated cohorts, viz. both the specific and general anti-avoidance provisions contained in the various tax statutes. Building on the principles established in Zandberg v Van Zyl, Dadoo Ltd and others v Krugersdorp Municipal Council and Commissioner of Customs and Excise v Randles Brothers & Hudson Ltd, the test which emerged and has been applied since, is broadly recognised as being that as formulated by Watermeyer JA in Randles, being that where the parties to a contract truly intended to act in accordance with the tenor of the agreement, irrespective of what their purpose for entering into that transaction was, that contract cannot be a simulated one. However, the Supreme Court of Appeal judgment in CSARS v NWK Ltd has necessitated that the principles applied previously be revisited academically to determine whether the doctrine for determining whether a simulation is present has changed - and if so, to what extent. Some argue that the comments in NWK, which is perceived to have changed the simulation test, were merely part of the obiter of the judgment, though they hasten to add that this does not mean that such comments are void of import where lower courts may consider the doctrine in future. Opposed hereto are those who are of the view that the judgment has indeed changed the simulation doctrine's landscape.

Description

Includes bibliographical references.

Keywords

Taxation

Reference:

Collections

Masters

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