Characterisation for treaty purposes of manufactured dividends received in terms of securities lending arrangements
| dc.contributor.advisor | West, Craig | |
| dc.contributor.author | Vanlierde, Angela | |
| dc.date.accessioned | 2021-02-04T13:47:14Z | |
| dc.date.available | 2021-02-04T13:47:14Z | |
| dc.date.issued | 2020 | |
| dc.date.updated | 2021-02-04T05:32:13Z | |
| dc.description.abstract | Equity securities lending arrangements are contracts whereby a shareholder lends his shares to a borrower for a period of time. If dividends are declared during that period, these accrue to the borrower, and the borrower pays a manufactured dividend to the lender as compensation. The applicable income tax legislation deems manufactured dividends to be dividends for purposes of dividends tax. However, unless manufactured dividends are governed by Article 10 of a double tax treaty, South Africa may not have the right to tax manufactured dividends received by non-resident lenders. This would result in a loss of revenue for the South African fiscus. This paper examined the qualification or characterisation for treaty purposes of manufactured dividend income earned by lenders in terms of securities lending arrangements. This examination was done through an analysis of the ‘dividends' definition in Article 10 of the 2017 OECD model convention. It was found that manufactured dividends are not ‘dividends' for treaty purposes, and are instead business income in terms of Article 7. South African domestic tax legislation was analysed, together with publications by the South African Revenue Service and National Treasury, and demonstrated that there is a risk of taxation not in accordance with the provisions of a convention, as well as a risk of revenue losses to the South African fiscus where a non-resident lender has no permanent establishment in South Africa. | |
| dc.identifier.apacitation | Vanlierde, A. (2020). <i>Characterisation for treaty purposes of manufactured dividends received in terms of securities lending arrangements</i>. (). ,Faculty of Commerce ,Department of Finance and Tax. Retrieved from http://hdl.handle.net/11427/32781 | en_ZA |
| dc.identifier.chicagocitation | Vanlierde, Angela. <i>"Characterisation for treaty purposes of manufactured dividends received in terms of securities lending arrangements."</i> ., ,Faculty of Commerce ,Department of Finance and Tax, 2020. http://hdl.handle.net/11427/32781 | en_ZA |
| dc.identifier.citation | Vanlierde, A. 2020. Characterisation for treaty purposes of manufactured dividends received in terms of securities lending arrangements. . ,Faculty of Commerce ,Department of Finance and Tax. http://hdl.handle.net/11427/32781 | en_ZA |
| dc.identifier.ris | TY - Master Thesis AU - Vanlierde, Angela AB - Equity securities lending arrangements are contracts whereby a shareholder lends his shares to a borrower for a period of time. If dividends are declared during that period, these accrue to the borrower, and the borrower pays a manufactured dividend to the lender as compensation. The applicable income tax legislation deems manufactured dividends to be dividends for purposes of dividends tax. However, unless manufactured dividends are governed by Article 10 of a double tax treaty, South Africa may not have the right to tax manufactured dividends received by non-resident lenders. This would result in a loss of revenue for the South African fiscus. This paper examined the qualification or characterisation for treaty purposes of manufactured dividend income earned by lenders in terms of securities lending arrangements. This examination was done through an analysis of the ‘dividends' definition in Article 10 of the 2017 OECD model convention. It was found that manufactured dividends are not ‘dividends' for treaty purposes, and are instead business income in terms of Article 7. South African domestic tax legislation was analysed, together with publications by the South African Revenue Service and National Treasury, and demonstrated that there is a risk of taxation not in accordance with the provisions of a convention, as well as a risk of revenue losses to the South African fiscus where a non-resident lender has no permanent establishment in South Africa. DA - 2020_ DB - OpenUCT DP - University of Cape Town KW - International Taxation LK - https://open.uct.ac.za PY - 2020 T1 - Characterisation for treaty purposes of manufactured dividends received in terms of securities lending arrangements TI - Characterisation for treaty purposes of manufactured dividends received in terms of securities lending arrangements UR - http://hdl.handle.net/11427/32781 ER - | en_ZA |
| dc.identifier.uri | http://hdl.handle.net/11427/32781 | |
| dc.identifier.vancouvercitation | Vanlierde A. Characterisation for treaty purposes of manufactured dividends received in terms of securities lending arrangements. []. ,Faculty of Commerce ,Department of Finance and Tax, 2020 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/32781 | en_ZA |
| dc.language.rfc3066 | eng | |
| dc.publisher.department | Department of Finance and Tax | |
| dc.publisher.faculty | Faculty of Commerce | |
| dc.subject | International Taxation | |
| dc.title | Characterisation for treaty purposes of manufactured dividends received in terms of securities lending arrangements | |
| dc.type | Master Thesis | |
| dc.type.qualificationlevel | Masters | |
| dc.type.qualificationlevel | MCom |