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An historical analysis of the development of a company as a single enterprise and the impact on group company taxation

  • Authors: Els, Tania
  • Date: 2020
  • Subjects: Taxation -- South Africa , Taxation -- History , Taxation -- Law and legislation -- South Africa , Business enterprises -- South Africa , Business enterprises -- Taxation -- Law and legislation -- South Africa , Corporation law -- South Africa , South Africa. Income Tax Act, 1962 , South Africa. Companies Act, 2008 , Separate legal personality , Group taxation
  • Language: English
  • Type: text , Thesis , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/154241 , vital:39628
  • Description: The company is considered a separate legal entity in both legislation and jurisprudence. The “veil” separating the company and its shareholders is a doctrine entrenched in company law that originated centuries ago. The doctrine is based on conditions that existed during a period that commenced with trading forms less complicated than the corporate groups found today. Trading forms known as guilds could be traced back to 1087, which gradually developed into regulated companies and, in the last century, into the joint-stock company form. The modern era has seen the development of groups of companies carrying on business as economic units. Company law, in regulating business forms, has failed to acknowledge the corporate group as a new business entity. The main purpose of this research was to analyse the origins of the separate legal personality of a company and its relevance for the present corporate group structures. The research aimed to understand company law and jurisprudence in South Africa in relation to the legal personality of a company and a corporate group. The final objective of this reform-orientated doctrinal research thesis was to provide clarity on the need to consider granting separate legal identity to corporate groups in recognition of their economic unity. A historically contextualised analysis was carried out on the development of trading through unregulated forms of businesses to the creation of the company as a regulated entity. The development of the legal persona of a company in legislation as well as jurisprudence was critically analysed in on the context of companies within a corporate group. A case study of a South African corporate group was used to highlight the different characteristics of the companies doing business in the form of a corporate group. The thesis concluded by recommending that legal personality should be extended to include a corporate group in order to facilitate the introduction of a group taxation regime.
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  • Date Issued: 2020

The South African income tax implications of a Stokvel

  • Authors: Matshego, Katlego
  • Date: 2020
  • Subjects: Rotating credit associations -- South Africa. , Taxation -- South Africa , Tax deductions -- South Africa
  • Language: English
  • Type: text , Thesis , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/143094 , vital:38201
  • Description: The term “Stokvel” originates from the rotating cattle auctions of English settlers in the Eastern Cape during the nineteen century. A Stokvel is defined as a credit union where a group of people agree to contribute a fixed amount of money to a common pool and is referred to as a rotating savings and credit association, where the contributions to a fund are given in whole or in part to each member. The goal of the thesis was to determine the “gross income” implications of the fund and its members, as well the deductibility of their expenses. An interpretative research approach was used in the research as it sought to understand and describe. No interviews were conducted for this research and the data used for the research are publicly available. The tax implications of five different types of a Stokvel were considered in relation to the research goals through the application of legislation and case law principles. The study established that a collection burial society, where funds are contributed after death, does not beneficially receive funds and it is not entitled to any deductions. The same applies to the member of that society. A contributing burial society, where funds are contributed over time, beneficially receives funds, which are included in “gross income”, and qualifies for deductions. The receipt by the member is exempt and deductions are prohibited by section 23(f). An entertainment Stokvel does not receive the contributions on its own behalf and benefit. No deductions are available to it. However, the member beneficially receives the contributions from the Stokvel, which are included in “gross income”, and qualifies for deductions. A purchasing power group, where items are purchased on behalf of members, does not receive the funds beneficially and no deductions are available to it. The members simply receive the goods they have paid for. Lastly an investment Stokvel, which invests contributions for the members, beneficially receives contributions and qualifies for various deductions. The member receives the share of income from the Stokvel for his/her own benefit. However, no deductions are available in respect of contributions.
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  • Date Issued: 2020

A comparative analysis of the new behaviours and terms introduced in the understatement penalty table in section 223 of the Tax Administration Act

  • Authors: Doolan, Kim
  • Date: 2017
  • Subjects: South Africa. Tax Administration Act, 2011 , Taxation -- South Africa , Taxation -- Law and legislation -- South Africa , Tax administration and procedure -- Law and legislation -- South Africa , Tax penalties -- Law and legislation -- South Africa , Taxpayer compliance -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: http://hdl.handle.net/10962/5802 , vital:20977
  • Description: The Tax Administration Act became effective on the 1 October 2012 and in Chapter 16 introduced the understatement penalty regime which replaced section 76 of the Income Tax Act. The understatement penalty is calculated by applying a percentage in terms of the table included in section 223 of the Tax Administration Act to the shortfall in tax giving rise to the imposition of the penalty. There are five behaviours reflected in the understatement penalty table in section 223, namely, “substantial understatement”, “reasonable care not taken in completing return”, “no reasonable grounds for tax position taken”, “gross negligence” and “intentional tax evasion”. “Substantial understatement” is the only behaviour defined in the Tax Administration Act. Section 222(1) of the Tax Administration Act requires SARS to impose the penalty reflected in the table in the event of an “understatement”, unless the “understatement” results from a “bona fide inadvertent error”. The term “bona fide inadvertent error” is not defined in the Tax Administration Act; neither is the term “obstructive”. The Memorandum on the Objects of the Tax Administration Laws Amendment Bill confirmed that guidance would be developed in this regard for the use of taxpayers and SARS officials. This guidance has not yet been released. Media reports express the view that the lack of definition of the behaviours is problematic for both SARS and taxpayers as the table is new and there is still room for interpretation and understanding of the meaning of each of the behaviours. The primary goal of this study was is to obtain a better understanding of the meaning of the new behaviours and terms introduced in the understatement penalty table. In addressing this main goal, the penalty tables and behaviours in legislation in New Zealand were compared to South Africa’s understatement penalty. The similarities and differences between the understatement penalty imposed in terms of Chapter 16 of the Tax Administration Act and the additional tax previously imposed in terms of section 76 of the Income Tax Act were also discussed to determine whether this would be of assistance in enabling a better understanding of the meaning of the behaviours and terms in section 223. Guidance on the interpretation of the various behaviours and terms was developed and a definition was proposed for the meaning of “bona fide inadvertent error” and “obstructive” to assist in the objective and consistent application of the understatement penalty table in relation to each shortfall identified. The proposed definition for “bona fide inadvertent error” is as follows: “An honest mistake made or simple oversight, which the taxpayer was not aware of, despite taking reasonable care and displaying a prudent attitude while making a genuine attempt to comply with all applicable tax obligations.” The definition for “obstructive” is proposed as: “Deliberately interfering with, causing difficulties (impeding) or delays in, or preventing the progress of a SARS audit or review.”
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  • Date Issued: 2017

The presumption of gult created by Section 235(2) of the Tax Administration Act: a constitutional and comparative perspective

  • Authors: Faifi, Farai
  • Date: 2014
  • Subjects: Guilt (Law) -- South Africa , Presumption of innocence -- South Africa , Income tax -- Law and legislation -- South Africa , Human rights -- Taxation -- South Africa , Taxpayer compliance -- Moral and ethical aspects -- South Africa , Taxation -- South Africa
  • Language: English
  • Type: Thesis , Masters , MCom
  • Identifier: vital:907 , http://hdl.handle.net/10962/d1012979
  • Description: This research examined the legal nature of the presumption of guilt created by section 235(2) of the South African Tax Admiration Act and considered whether or not its practical application violates the taxpayer’s fundamental right contained in section 35(3) of the Constitution, which gives every accused taxpayer the right to a fair trial, including the right to be presumed innocent. The research also provided clarity on the constitutionality of this presumption because it has been widely criticised for unjustifiably violating the taxpayer's constitutional right to a fair trial. The conclusion reached is that the presumption created by section 235(2) of the Tax Administration Act constitutes an evidentiary burden rather than a reverse onus. It does not create the possibility of conviction, unlike a reverse onus where conviction is possible, despite the existence of a reasonable doubt. Therefore, it does not violate the accused taxpayer’s the right to a fair trial and the right to be presumed innocent and hence it is constitutional. Accordingly, the chances that the accused taxpayer will succeed in challenging the constitutionality of section 235(2) of the Act are slim.
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  • Date Issued: 2014

Redistribution and taxation in South Africa : inaugural lecture delivered at Rhodes University

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