A critical analysis of the deductibility for income tax purposes of dual-purpose expenditure
- Authors: Pickup, Richard Kenneth
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4155 , vital:20628
- Description: This thesis critically analysed the apportionment of dual-purpose expenditure. In doing so, two categories of dual-expenditure were examined: expenditure that has been incurred for both trade and non-trade purposes, and expenditure that has been incurred to produce both taxable and exempt income. In conducting this analysis, this thesis set out to answer three questions: has the apportionment of dual-purpose expenditure been officially sanctioned in South Africa, when does the need for apportionment arise, and on what basis should a taxpayer apportion expenditure that has been incurred for a dual purpose? A doctrinal methodology was applied to the documentary data which consisted of relevant tax legislation; South African, Australian and English case law; and commentary of experts in the field of tax law. From the analysis performed, it was revealed that the apportionment of dual-purpose expenditure has been officially sanctioned in South Africa. In addition, it was concluded that the applicable legal principles for determining the need for apportionment and for performing the apportionment calculation are clear and well-established. The difficulty which taxpayers, the courts and the South African Revenue Service face, however, is applying these principles in practice. This research therefore concluded that there is a need for further guidance in this complex area of tax law. In addition, this research proposed some recommendations which could provide more certainty and clarity.
- Full Text:
- Authors: Pickup, Richard Kenneth
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4155 , vital:20628
- Description: This thesis critically analysed the apportionment of dual-purpose expenditure. In doing so, two categories of dual-expenditure were examined: expenditure that has been incurred for both trade and non-trade purposes, and expenditure that has been incurred to produce both taxable and exempt income. In conducting this analysis, this thesis set out to answer three questions: has the apportionment of dual-purpose expenditure been officially sanctioned in South Africa, when does the need for apportionment arise, and on what basis should a taxpayer apportion expenditure that has been incurred for a dual purpose? A doctrinal methodology was applied to the documentary data which consisted of relevant tax legislation; South African, Australian and English case law; and commentary of experts in the field of tax law. From the analysis performed, it was revealed that the apportionment of dual-purpose expenditure has been officially sanctioned in South Africa. In addition, it was concluded that the applicable legal principles for determining the need for apportionment and for performing the apportionment calculation are clear and well-established. The difficulty which taxpayers, the courts and the South African Revenue Service face, however, is applying these principles in practice. This research therefore concluded that there is a need for further guidance in this complex area of tax law. In addition, this research proposed some recommendations which could provide more certainty and clarity.
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A critical analysis of the tax concessions relating to medical expenses, with particular emphasis on persons with a physical impairment or disability
- Authors: Rogers, Richard
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4144 , vital:20623
- Description: This thesis provides a critical analysis of the tax concessions granted in respect of medical costs, with particular reference to persons with a physical impairment or “disability” in the South African context. The primary method of collecting information for this research was through an extensive analysis of the South African legislation that is specifically applicable to a person who has a physical impairment or a “disability”. The analysis placed particular emphasis on the qualifying diagnosis criteria for a “disability” as defined for tax purposes as well as on the qualifying expenditure incurred in consequence of a person’s physical impairment or “disability”. A further goal of the research was to analyse the specific provisions of the Income Tax Act that are applicable to a special trust created for the benefit of a person with a physical impairment or “disability”. This research also includes a brief evaluation of the extent to which medical schemes provide coverage for non-discretionary expenditure items incurred in consequence of a person’s “disability” and whether this differs from the qualifying expenditure in terms of the Income Tax Act. It is important to conduct research of this nature in order to identify areas where the legislation could be improved. Accordingly, the thesis also recommends possible amendments to the current provisions of the legislation that are specifically applicable to persons with a physical impairment or “disability”.
- Full Text:
- Authors: Rogers, Richard
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4144 , vital:20623
- Description: This thesis provides a critical analysis of the tax concessions granted in respect of medical costs, with particular reference to persons with a physical impairment or “disability” in the South African context. The primary method of collecting information for this research was through an extensive analysis of the South African legislation that is specifically applicable to a person who has a physical impairment or a “disability”. The analysis placed particular emphasis on the qualifying diagnosis criteria for a “disability” as defined for tax purposes as well as on the qualifying expenditure incurred in consequence of a person’s physical impairment or “disability”. A further goal of the research was to analyse the specific provisions of the Income Tax Act that are applicable to a special trust created for the benefit of a person with a physical impairment or “disability”. This research also includes a brief evaluation of the extent to which medical schemes provide coverage for non-discretionary expenditure items incurred in consequence of a person’s “disability” and whether this differs from the qualifying expenditure in terms of the Income Tax Act. It is important to conduct research of this nature in order to identify areas where the legislation could be improved. Accordingly, the thesis also recommends possible amendments to the current provisions of the legislation that are specifically applicable to persons with a physical impairment or “disability”.
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A critical analysis of the taxation of financial assets and financial liabilities in terms of section 24JB of the South African Income Tax Act
- Authors: Snyman, S L
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4178 , vital:20630
- Description: Section 24JB of the Income Tax Act No. 58 of 1962 was introduced with effect from 1 January 2014 in order to govern the taxation of financial instruments of a covered person as defined. Section 24JB represents a significant departure from the standard tax principles for financial instruments and will therefore directly affect the timing of the imposition of tax on gains and losses on these financial instruments, resulting in a significant adverse cash flow effect for the taxpayer. The main purpose of the research is to investigate the meaning of the wording in section 24JB through a critical analysis of the domestic tax legislation in the context of practical examples of specific financial assets and liabilities. The research includes an analysis of the scope of section 24JB by examining the definition of a “covered person” as well as the specific financial instruments to which the section applies, with reference to the International Financial Reporting Standards classifications and terms. The interaction of section 24JB with the rest of the Act is examined and whether this section overrides all the other provisions, specifically with reference to the taxation of dividends and the general and specific anti-avoidance provisions contained elsewhere in the Act. The study aims to highlight anomalies and possible unintended tax consequences arising from the current drafting of section 24JB using practical examples, highlighting the major areas of concern and issues of interpretation of section 24JB. Recommendations are made for amendments to the Act or the provision of guidance in the form of an Explanatory Memorandum or Interpretation Note to be issued by SARS.
- Full Text:
- Authors: Snyman, S L
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4178 , vital:20630
- Description: Section 24JB of the Income Tax Act No. 58 of 1962 was introduced with effect from 1 January 2014 in order to govern the taxation of financial instruments of a covered person as defined. Section 24JB represents a significant departure from the standard tax principles for financial instruments and will therefore directly affect the timing of the imposition of tax on gains and losses on these financial instruments, resulting in a significant adverse cash flow effect for the taxpayer. The main purpose of the research is to investigate the meaning of the wording in section 24JB through a critical analysis of the domestic tax legislation in the context of practical examples of specific financial assets and liabilities. The research includes an analysis of the scope of section 24JB by examining the definition of a “covered person” as well as the specific financial instruments to which the section applies, with reference to the International Financial Reporting Standards classifications and terms. The interaction of section 24JB with the rest of the Act is examined and whether this section overrides all the other provisions, specifically with reference to the taxation of dividends and the general and specific anti-avoidance provisions contained elsewhere in the Act. The study aims to highlight anomalies and possible unintended tax consequences arising from the current drafting of section 24JB using practical examples, highlighting the major areas of concern and issues of interpretation of section 24JB. Recommendations are made for amendments to the Act or the provision of guidance in the form of an Explanatory Memorandum or Interpretation Note to be issued by SARS.
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A discussion of the concept, “place of effective management” and the proposed changes, in the context of South African tax law
- Authors: Singh, Nishika
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4166 , vital:20629
- Description: The concept, “place of effective management”, is used in South African tax legislation to determine the residency of companies and it is also used by the Organisation for Economic Co-operation and Development (OECD) and in many tax treaties as a tie-breaker clause to determine the residency of companies that may appear to be dual resident or to determine which country has the taxing rights to income that may be subject to double tax due to the income being from a source outside of the company’s country of residence. The concept is not defined in any tax legislation and there is no uniform interpretation of the concept globally. The former guidance provided by the South African Revenue Services (SARS) adopted a hierarchal approach and the focus was the implementation of the Board of Directors’ decisions. This interpretation was not aligned to the guidance of the OECD whose focus is the place where the key management and commercial decisions of the entity are made. The current SARS guidance has been aligned to the OECD guidance and, essentially, the core principle is to determine who makes the key commercial and management decisions of the company and the place where these individuals are making these decisions. The current SARS and OECD guidance have now been aligned. The current SARS and OECD interpretations have been found to be a more effective tie-breaker clause than the former interpretations.
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- Authors: Singh, Nishika
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4166 , vital:20629
- Description: The concept, “place of effective management”, is used in South African tax legislation to determine the residency of companies and it is also used by the Organisation for Economic Co-operation and Development (OECD) and in many tax treaties as a tie-breaker clause to determine the residency of companies that may appear to be dual resident or to determine which country has the taxing rights to income that may be subject to double tax due to the income being from a source outside of the company’s country of residence. The concept is not defined in any tax legislation and there is no uniform interpretation of the concept globally. The former guidance provided by the South African Revenue Services (SARS) adopted a hierarchal approach and the focus was the implementation of the Board of Directors’ decisions. This interpretation was not aligned to the guidance of the OECD whose focus is the place where the key management and commercial decisions of the entity are made. The current SARS guidance has been aligned to the OECD guidance and, essentially, the core principle is to determine who makes the key commercial and management decisions of the company and the place where these individuals are making these decisions. The current SARS and OECD guidance have now been aligned. The current SARS and OECD interpretations have been found to be a more effective tie-breaker clause than the former interpretations.
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The application of the “reasonable suspicion of bias” test in relation to the appointment of a tax Ombud in South Africa
- Authors: Tendayi, Tatenda Lovemore
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4190 , vital:20631
- Description: The South African Parliament established a tax Ombud to act as an oversight body which reviews administrative complaints against SARS. Concerns have, however, been raised by academics and experts that the tax Ombud is not adequately independent of SARS so as to be able to investigate the complaints effectively and without bias. The manner in which the appointment, funding and staffing of the tax Ombud have been provided for, have been cited as the major sources of the perception of impartiality. According to decisions of the highest courts in South Africa, the “reasonable suspicion of bias” test must be applied in cases where institutional bias is alleged. The test investigates whether or not the reasonable person would suspect that the particular decision maker will be biased, due to institutional factors. After applying the “reasonable suspicion of bias” test to the model of the South African tax Ombud, the conclusion reached is that the model of the tax Ombud gives rise to a reasonable suspicion of bias. Notwithstanding the fact that the model gives rise to a suspicion of bias, it is concluded that the model, in its current form, remains fair as safeguards have been put in place by the legislature to ensure that fairness prevails. There is, however, international precedent which suggests that the sources of institutional bias can be eliminated completely from the model of the tax Ombud. Specifically, if the funding and staffing of the tax Ombud’s office is removed from SARS, the model of the tax Ombud would move closer to the ideal standards of fairness.
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- Authors: Tendayi, Tatenda Lovemore
- Date: 2016
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: http://hdl.handle.net/10962/4190 , vital:20631
- Description: The South African Parliament established a tax Ombud to act as an oversight body which reviews administrative complaints against SARS. Concerns have, however, been raised by academics and experts that the tax Ombud is not adequately independent of SARS so as to be able to investigate the complaints effectively and without bias. The manner in which the appointment, funding and staffing of the tax Ombud have been provided for, have been cited as the major sources of the perception of impartiality. According to decisions of the highest courts in South Africa, the “reasonable suspicion of bias” test must be applied in cases where institutional bias is alleged. The test investigates whether or not the reasonable person would suspect that the particular decision maker will be biased, due to institutional factors. After applying the “reasonable suspicion of bias” test to the model of the South African tax Ombud, the conclusion reached is that the model of the tax Ombud gives rise to a reasonable suspicion of bias. Notwithstanding the fact that the model gives rise to a suspicion of bias, it is concluded that the model, in its current form, remains fair as safeguards have been put in place by the legislature to ensure that fairness prevails. There is, however, international precedent which suggests that the sources of institutional bias can be eliminated completely from the model of the tax Ombud. Specifically, if the funding and staffing of the tax Ombud’s office is removed from SARS, the model of the tax Ombud would move closer to the ideal standards of fairness.
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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.
- Full Text:
- 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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