A critical analysis of the criteria applied in South Africa to distinguish an independent contractor from an employee for income tax purposes
- Authors: Mkhoma, Londekile Nosipho
- Date: 2023-04
- Subjects: Independent contractor , Common law tests , Income tax
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10948/61702 , vital:71827
- Description: The study set out to critically analyse the criteria used by South Africa to determine the distinction between independent contractors and employees. Comparisons are also drawn with the criteria used in the United Kingdom(UK) and New Zealand (NZ) to assess whether there are new ideas that can be drawn from these and help improve the criteria used in South Africa. This was motivated by the ongoing debates around this issue and the desire to make a contribution that might bring some new insights and clarity. Under South African tax legislation employers are only obliged to deduct income tax from persons identified as employees while on the other hand, they cannot deduct tax contributions from the money paid to independent contractors for services rendered. Furthermore, there is no statutory definition for the term “independent contractor” in the Income Tax Act of South Africa nor in the country’s labour legislation. The definition of this term has largely been established by the labour courts in instances where disputes have arisen around these matters. Using a doctrinal research method (including a comparative legal research), which is a qualitative research approach, articles, statutes, judgements, explanatory memoranda, and policy documents on the subject under investigation were analysed. It is submitted that the criteria used in the two countries used in the comparison are similar to the ones used in South Africa, with some variations. All three countries use similar tests to make their determinations and a survey of the UK and NZ’s case law indicates that the most preferred criteria are the multifactoral approach to determine the true nature of the relationship between employers and their employees. This approach has been found to be more flexible which allows it to accommodate the changes that are occurring in the world of work. In the South African context, the labour court has adopted a substance-over-form approach in making their determinations, arguing that the nature of the working relationship between employer and employee is a more important indicator than the mere contents of a written contract. The labour court has also used labour legislation mainly to assist in the interpretation of the distinction between independent contractors and employees. The study established that the criteria used in the UK is a bit more complex because workers are put in three different categories and the definition of employee is not 4 uniform in all the available statutes. In New Zealand the multiple factor approach is preferred just like in South Africa. In conclusion is submitted that the study established that there is nothing, other than the UK’s Mutuality of Obligation Test, that would assist in further clarifying the criteria used to classify employees or independent contractors in South Africa , Thesis (MA) -- Faculty of Faculty of Business and Economic Sciences, 2023
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- Date Issued: 2023-04
A historical overview of the development of the trading stock provisions in the Income Tax Act
- Authors: Skotidas, Maria
- Date: 2012
- Subjects: Income tax , Stocks , Taxation
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:8967 , http://hdl.handle.net/10948/d1020829
- Description: The aim of the treatise was to provide a clear understanding of the changes to the trading stock provisions in the Income Tax Act. Various sections of the Act were covered and case law was reviewed with relevance in relation to this research project in order to gain a deeper understanding of the development of the trading stock provisions, thus bringing together the tax legislation and the case law principles. Emphasis was placed on the development of the trading stock provisions. The conclusion from this was that some of the amendments were merely textual in nature whilst others were driven by case law. There were instances where cases did not give rise to amendments but simply reinforced existing provisions by providing guidance and clarity by way of the judges’ interpretations of those provisions. The amendments relating to the trading stock provisions in the Act and the judges’ interpretation of the applicable case law have resulted in a comprehensive understanding of the treatment of trading stock.
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- Date Issued: 2012