An analysis of the income tax consequences resulting from implementing the Income Tax Bill (2012) in Zimbabwe
- Authors: Kanyenze, Rumbidzai
- Date: 2015
- Subjects: Income tax deductions -- Zimbabwe , Income tax -- Law and legislation -- Zimbabwe
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:914 , http://hdl.handle.net/10962/d1017536
- Description: The Income Tax Bill (2012) proposes certain changes to the existing Income Tax Act that will impact on the method used to determine the taxable income of a taxpayer in Zimbabwe. Therefore, it is important to understand the tax consequences the Income Tax Bill creates for the taxpayer. The research aimed to elaborate on and explain the tax consequences that will arise as a result of applying the Income Tax Bill in Zimbabwe. The research was based on a qualitative method which involved the analysis and the interpretation of extracts from legislation and articles written on the proposed changes. The current “gross income” of a taxpayer consists of amounts earned from a source within or deemed to be from within Zimbabwe The proposed changes to the Act will change the tax system to a residence-based system, where resident taxpayers are taxed on amounts earned from all sources. Therefore, the driving factor which determines the taxability of an amount will become the taxpayer’s residency. Clause 2 of the proposed Act provides that income earned by a taxpayer should be separated into employment income, business income, property income and other specified income. This will make it unnecessary to determine the nature of an amount because capital amounts will be subject to income tax. The current Act provides for the deduction of expenditure incurred for the purpose of trade or in the production of income. Section 31(1)(a) of the proposed Act will restrict permissible deductions to expenditure incurred in the production of income. Consequently, expenditure not incurred for the purpose of earning income will no longer be deductible when the Income Tax Bill is implemented. The proposed Income Tax Act will increase the taxable income of a taxpayer as it makes amounts that are not currently subject to tax taxable, whilst restricting the deductions claimable.
- Full Text:
- Date Issued: 2015
- Authors: Kanyenze, Rumbidzai
- Date: 2015
- Subjects: Income tax deductions -- Zimbabwe , Income tax -- Law and legislation -- Zimbabwe
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:914 , http://hdl.handle.net/10962/d1017536
- Description: The Income Tax Bill (2012) proposes certain changes to the existing Income Tax Act that will impact on the method used to determine the taxable income of a taxpayer in Zimbabwe. Therefore, it is important to understand the tax consequences the Income Tax Bill creates for the taxpayer. The research aimed to elaborate on and explain the tax consequences that will arise as a result of applying the Income Tax Bill in Zimbabwe. The research was based on a qualitative method which involved the analysis and the interpretation of extracts from legislation and articles written on the proposed changes. The current “gross income” of a taxpayer consists of amounts earned from a source within or deemed to be from within Zimbabwe The proposed changes to the Act will change the tax system to a residence-based system, where resident taxpayers are taxed on amounts earned from all sources. Therefore, the driving factor which determines the taxability of an amount will become the taxpayer’s residency. Clause 2 of the proposed Act provides that income earned by a taxpayer should be separated into employment income, business income, property income and other specified income. This will make it unnecessary to determine the nature of an amount because capital amounts will be subject to income tax. The current Act provides for the deduction of expenditure incurred for the purpose of trade or in the production of income. Section 31(1)(a) of the proposed Act will restrict permissible deductions to expenditure incurred in the production of income. Consequently, expenditure not incurred for the purpose of earning income will no longer be deductible when the Income Tax Bill is implemented. The proposed Income Tax Act will increase the taxable income of a taxpayer as it makes amounts that are not currently subject to tax taxable, whilst restricting the deductions claimable.
- Full Text:
- Date Issued: 2015
An analysis of the tax consequences of the double tax agreement between South Africa and the Democratic Republic of Congo
- Authors: Mkabile, Nwabisa
- Date: 2015
- Subjects: Double taxation -- South Africa , Double taxation -- Congo (Democratic Republic) , Income tax -- South Africa -- Foreign income , Income tax -- Congo (Democratic Republic) -- Foreign income
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:916 , http://hdl.handle.net/10962/d1017539
- Description: As a result of the different tax systems adopted by countries, foreign-sourced income earned by taxpayers may be subject to double taxation. This may therefore impede cross-border trade and investment. Double taxation relief is provided unilaterally, in terms of a country’s domestic laws or bilaterally in terms of Double Taxation Agreements. South African residents earning income from the Democratic Republic of Congo may be subject to tax in both countries. To eliminate such double taxation the South African Income Tax Act, No 58 of 1962, provides for unilateral relief from double taxation in the form of exemptions, rebates and deductions. The double tax agreement between South Africa and the Democratic Republic of the Congo came into effect recently and double taxation relief for South African residents is now also available in terms of tax treaty law. The objective of the research was to determine whether the combination of the unilateral measures and the double tax agreement provide relief in respect of all types of income earned by South African residents in the Democratic Republic of the Congo. It was concluded that the double tax agreement, together with the unilateral relief provided for in the Income Tax Act will grant relief for all types of income earned by South African residents in the Democratic Republic of the Congo.
- Full Text:
- Date Issued: 2015
- Authors: Mkabile, Nwabisa
- Date: 2015
- Subjects: Double taxation -- South Africa , Double taxation -- Congo (Democratic Republic) , Income tax -- South Africa -- Foreign income , Income tax -- Congo (Democratic Republic) -- Foreign income
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:916 , http://hdl.handle.net/10962/d1017539
- Description: As a result of the different tax systems adopted by countries, foreign-sourced income earned by taxpayers may be subject to double taxation. This may therefore impede cross-border trade and investment. Double taxation relief is provided unilaterally, in terms of a country’s domestic laws or bilaterally in terms of Double Taxation Agreements. South African residents earning income from the Democratic Republic of Congo may be subject to tax in both countries. To eliminate such double taxation the South African Income Tax Act, No 58 of 1962, provides for unilateral relief from double taxation in the form of exemptions, rebates and deductions. The double tax agreement between South Africa and the Democratic Republic of the Congo came into effect recently and double taxation relief for South African residents is now also available in terms of tax treaty law. The objective of the research was to determine whether the combination of the unilateral measures and the double tax agreement provide relief in respect of all types of income earned by South African residents in the Democratic Republic of the Congo. It was concluded that the double tax agreement, together with the unilateral relief provided for in the Income Tax Act will grant relief for all types of income earned by South African residents in the Democratic Republic of the Congo.
- Full Text:
- Date Issued: 2015
Base erosion and profit shifting by multinational corporations and weaknesses revealed in South African income tax legislation
- Authors: Peerbhai, Aneesa
- Date: 2015
- Subjects: International business enterprises -- Law and legislation -- South Africa , Corporations -- Taxation -- Law and legislation -- South Africa , Tax planning -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:917 , http://hdl.handle.net/10962/d1017540
- Description: This research examined the concept of base erosion and profit shifting in the context of tax schemes employed by multinational corporations. The objective of this thesis was to identify weaknesses within South Africa’s income tax legislation, based on these schemes, and further to propose recommendations to counter the occurrence of base erosion and profit shifting by multinational companies. The research also comprised of a limited review of current global and South African initiatives to address the problem of base erosion and profit shifting. It was concluded that there are a number of weaknesses in the definitions and provisions of the South African income tax legislation that need to be addressed in order to reduce base erosion and profit shifting. Brief recommendations were proposed in relation to each of the weaknesses, in order to address them.
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- Date Issued: 2015
- Authors: Peerbhai, Aneesa
- Date: 2015
- Subjects: International business enterprises -- Law and legislation -- South Africa , Corporations -- Taxation -- Law and legislation -- South Africa , Tax planning -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:917 , http://hdl.handle.net/10962/d1017540
- Description: This research examined the concept of base erosion and profit shifting in the context of tax schemes employed by multinational corporations. The objective of this thesis was to identify weaknesses within South Africa’s income tax legislation, based on these schemes, and further to propose recommendations to counter the occurrence of base erosion and profit shifting by multinational companies. The research also comprised of a limited review of current global and South African initiatives to address the problem of base erosion and profit shifting. It was concluded that there are a number of weaknesses in the definitions and provisions of the South African income tax legislation that need to be addressed in order to reduce base erosion and profit shifting. Brief recommendations were proposed in relation to each of the weaknesses, in order to address them.
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- Date Issued: 2015
E-commerce: the challenge of virtual permanent establishments
- Adlkofer, Michelle Leigh, Venter, Michelle
- Authors: Adlkofer, Michelle Leigh , Venter, Michelle
- Date: 2015
- Subjects: Organisation for Economic Co-operation and Development , Electronic commerce , Electronic commerce -- Taxation , Double taxation -- Treaties , Globalization
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:921 , http://hdl.handle.net/10962/d1020057
- Description: The continued growth of world commerce has led to the advance of the permanent establishment principles. These principles are, however, constantly challenged by the developments of e-commerce. This thesis considers the taxing of a permanent establishment and the influence of e-commerce on the concept of a permanent establishment. In 2000, the Organisation for Economic Co-operation and Development (“OECD”) developed and introduced guidelines on how to deal with e-commerce in the context of a permanent establishment. Since the OECD guidelines on e-commerce were issued, the permanent establishment principles have come under further scrutiny. The latest development came about in 2013 with the release of the Base Erosion and Profit Shifting (“BEPS”) Action Plan. This Action Plan addresses the intention of the OECD to deal with the taxing of the digital economy. With the development of e-commerce and the result of e-commerce creating intangible boundaries between countries, the concept of a virtual permanent establishment has emerged. This has resulted in the need to tax a presence of an enterprise in a jurisdiction where no actual physical connection can be established. Various authors have made suggestions on how to ensure that an economy in which business is being carried on is correctly compensated for in the form of taxes. The source of income is the driving force for the imposition of taxation today. The main goal of this thesis was to explore the alignment of the concepts of a permanent establishment and e-commerce in the digital economy. This study therefore examined the concepts of both permanent establishments and e-commerce, and explored authors’ views and suggestions on how to deal with the inter-related effects of these two concepts. The relevant Action Points in the OECD Action Plan were also considered. , Maiden name: Venter, Michelle
- Full Text:
- Date Issued: 2015
- Authors: Adlkofer, Michelle Leigh , Venter, Michelle
- Date: 2015
- Subjects: Organisation for Economic Co-operation and Development , Electronic commerce , Electronic commerce -- Taxation , Double taxation -- Treaties , Globalization
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:921 , http://hdl.handle.net/10962/d1020057
- Description: The continued growth of world commerce has led to the advance of the permanent establishment principles. These principles are, however, constantly challenged by the developments of e-commerce. This thesis considers the taxing of a permanent establishment and the influence of e-commerce on the concept of a permanent establishment. In 2000, the Organisation for Economic Co-operation and Development (“OECD”) developed and introduced guidelines on how to deal with e-commerce in the context of a permanent establishment. Since the OECD guidelines on e-commerce were issued, the permanent establishment principles have come under further scrutiny. The latest development came about in 2013 with the release of the Base Erosion and Profit Shifting (“BEPS”) Action Plan. This Action Plan addresses the intention of the OECD to deal with the taxing of the digital economy. With the development of e-commerce and the result of e-commerce creating intangible boundaries between countries, the concept of a virtual permanent establishment has emerged. This has resulted in the need to tax a presence of an enterprise in a jurisdiction where no actual physical connection can be established. Various authors have made suggestions on how to ensure that an economy in which business is being carried on is correctly compensated for in the form of taxes. The source of income is the driving force for the imposition of taxation today. The main goal of this thesis was to explore the alignment of the concepts of a permanent establishment and e-commerce in the digital economy. This study therefore examined the concepts of both permanent establishments and e-commerce, and explored authors’ views and suggestions on how to deal with the inter-related effects of these two concepts. The relevant Action Points in the OECD Action Plan were also considered. , Maiden name: Venter, Michelle
- Full Text:
- Date Issued: 2015
Encouraging individual retirement savings in South Africa
- Authors: Hirschbeck, Lisa
- Date: 2015
- Subjects: Retirement income -- Planning-- South Africa , Retirement income -- Government policy -- South Africa , Pension trusts -- South Africa -- Management , Pension trusts -- Termination -- Law and legislation -- South Africa , Income tax deductions for retirement contributions -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:913 , http://hdl.handle.net/10962/d1017535
- Description: Many South Africans may not have adequate retirement savings when they retire and this has the effect of a low income replacement ratio on retirement that may lead to a decrease in the standard of living of the retiree and in extreme cases the retiree becoming dependent on their family and the government. Owing to this trend of no or inadequate retirement savings, South Africa embarked on a retirement reform journey in 2004. The goal of this research is to determine whether the retirement reform mechanisms outlined by National Treasury would encourage individual retirement savings that should assist South Africans to achieve stability of income in their retirement. This research analysed the current retirement savings options and vehicles available for South Africans, the current tax incentives and disincentives and reviewed the proposed changes to tax incentives and disincentives during the accumulation phase of retirement savings and explained how these proposed tax incentives are harmonised for the accumulation phase of retirement. The research explained how National Treasury aims to limit pre-retirement withdrawals and how it intends to encourage the annuitisation of post-retirement benefits. The penultimate chapter of this research measured the effect (by making certain assumptions) of the changes proposed by National Treasury on the income replacement ratio of the retiree. Throughout the research comparisons were made between The OECD Roadmap for the good design of defined contribution pension plans and National Treasury’s proposals. This research did not directly address the effect of increased life expectancies on retirement savings or increases in youth unemployment and the effect that this may have on retirement savings. The effect of financial charges levied on retirement savings on the income replacement ratio of a retiree was also not explored. Furthermore, not all pension funds are regulated by the Pension Funds Act and how these pension funds can be brought within the purview of the Pension Funds Act was not investigated. Automatic enrolment of retirement savings for all employees in South Africa in retirement vehicles is a further research area that could be addressed.
- Full Text:
- Date Issued: 2015
- Authors: Hirschbeck, Lisa
- Date: 2015
- Subjects: Retirement income -- Planning-- South Africa , Retirement income -- Government policy -- South Africa , Pension trusts -- South Africa -- Management , Pension trusts -- Termination -- Law and legislation -- South Africa , Income tax deductions for retirement contributions -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:913 , http://hdl.handle.net/10962/d1017535
- Description: Many South Africans may not have adequate retirement savings when they retire and this has the effect of a low income replacement ratio on retirement that may lead to a decrease in the standard of living of the retiree and in extreme cases the retiree becoming dependent on their family and the government. Owing to this trend of no or inadequate retirement savings, South Africa embarked on a retirement reform journey in 2004. The goal of this research is to determine whether the retirement reform mechanisms outlined by National Treasury would encourage individual retirement savings that should assist South Africans to achieve stability of income in their retirement. This research analysed the current retirement savings options and vehicles available for South Africans, the current tax incentives and disincentives and reviewed the proposed changes to tax incentives and disincentives during the accumulation phase of retirement savings and explained how these proposed tax incentives are harmonised for the accumulation phase of retirement. The research explained how National Treasury aims to limit pre-retirement withdrawals and how it intends to encourage the annuitisation of post-retirement benefits. The penultimate chapter of this research measured the effect (by making certain assumptions) of the changes proposed by National Treasury on the income replacement ratio of the retiree. Throughout the research comparisons were made between The OECD Roadmap for the good design of defined contribution pension plans and National Treasury’s proposals. This research did not directly address the effect of increased life expectancies on retirement savings or increases in youth unemployment and the effect that this may have on retirement savings. The effect of financial charges levied on retirement savings on the income replacement ratio of a retiree was also not explored. Furthermore, not all pension funds are regulated by the Pension Funds Act and how these pension funds can be brought within the purview of the Pension Funds Act was not investigated. Automatic enrolment of retirement savings for all employees in South Africa in retirement vehicles is a further research area that could be addressed.
- Full Text:
- Date Issued: 2015
The meaning of expenditure actually incurred in the context of share-based payments for trading stock or services rendered
- Authors: Nguta, Mbulelo
- Date: 2015
- Subjects: South African Revenue Service , Labat Africa , Stocks -- Taxation -- Law and legislation -- South Africa , Income tax deductions for expenses , Income tax -- Accounting -- Law and legislation -- South Africa , Actions and defenses
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:920 , http://hdl.handle.net/10962/d1018661
- Description: Section 11(a) of the Income Tax Act 58 of 1962 entitles taxpayers to a deduction in respect of expenditure actually incurred, provided that all the other requirements of section 11 and section 23 of the Act have been met. A company may issue its own shares, credited as fully paid up, as a payment for trading stock or services rendered, as was the case in C:SARS v Labat Africa (2011) 74 SATC 1. The question that was raised by this decision is whether the issue of shares constitutes “expenditure” as contemplated in section 11(a) of the Act. It is trite that a share in a company is a bundle of rights which entitle the holder to dividends when declared and to a vote in shareholders’ meetings and that a share does not come into the hands of a shareholder by way of transfer from the company, but is rather created as a bundle of rights for him in the company. In C: SARS v Labat Africa, the Supreme Court of Appeal decided that to issue shares as a payment for goods is not expenditure as contemplated in section 11(a) of the Act. The Act does not define “expenditure”. It has been interpreted in certain cases as a payment of money or disbursement, while it has been interpreted as the undertaking of a legal obligation in other cases. The Labat Africa case has been criticised for its interpretation of expenditure on the grounds that it is contrary to the principle that “actually incurred” does not mean “actually paid”. This research has argued that, in the context of the Labat Africa case, which related to an issue of shares in payment for goods, Harms AP’s judgment was concerned with showing why a share issue is not expenditure. He could not have intended to deny a deduction to transactions such as credit purchases.
- Full Text:
- Date Issued: 2015
- Authors: Nguta, Mbulelo
- Date: 2015
- Subjects: South African Revenue Service , Labat Africa , Stocks -- Taxation -- Law and legislation -- South Africa , Income tax deductions for expenses , Income tax -- Accounting -- Law and legislation -- South Africa , Actions and defenses
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:920 , http://hdl.handle.net/10962/d1018661
- Description: Section 11(a) of the Income Tax Act 58 of 1962 entitles taxpayers to a deduction in respect of expenditure actually incurred, provided that all the other requirements of section 11 and section 23 of the Act have been met. A company may issue its own shares, credited as fully paid up, as a payment for trading stock or services rendered, as was the case in C:SARS v Labat Africa (2011) 74 SATC 1. The question that was raised by this decision is whether the issue of shares constitutes “expenditure” as contemplated in section 11(a) of the Act. It is trite that a share in a company is a bundle of rights which entitle the holder to dividends when declared and to a vote in shareholders’ meetings and that a share does not come into the hands of a shareholder by way of transfer from the company, but is rather created as a bundle of rights for him in the company. In C: SARS v Labat Africa, the Supreme Court of Appeal decided that to issue shares as a payment for goods is not expenditure as contemplated in section 11(a) of the Act. The Act does not define “expenditure”. It has been interpreted in certain cases as a payment of money or disbursement, while it has been interpreted as the undertaking of a legal obligation in other cases. The Labat Africa case has been criticised for its interpretation of expenditure on the grounds that it is contrary to the principle that “actually incurred” does not mean “actually paid”. This research has argued that, in the context of the Labat Africa case, which related to an issue of shares in payment for goods, Harms AP’s judgment was concerned with showing why a share issue is not expenditure. He could not have intended to deny a deduction to transactions such as credit purchases.
- Full Text:
- Date Issued: 2015
The tax consequences of a contingent liability disposed of as part of the sale of a business as a going concern
- Authors: Staude, Daylan
- Date: 2015
- Subjects: Sale of business enterprises -- Taxation -- South Africa , Sale of business enterprises -- Law and legislation -- South Africa , Tax deductions -- South Africa , Contingent liabilities (Accounting) -- Taxation -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:918 , http://hdl.handle.net/10962/d1017544
- Description: The sale of an entity as a going concern has a number of tax consequences for both the purchaser and the seller. The tax deductibility of a contingent liability upon its transfer from the seller to the purchaser, where the selling price has been reduced by the value of the contingent liabilities transferred, remains uncertain following the decision in Ackermans Ltd v Commissioner for the South African Revenue Service. An expense is either deductible under a specific section of the Income Tax Act, 58 of 1962, or under the general expense provisions in terms of sections 11(a) and 23(g). The Act does not contain a specific section relating to contingent liabilities and therefore a contingent liability will need to be considered for deduction under these sections. The Act further disallows an expense as a deduction under section 23(e), where a reserve is created (for example a leave pay provision). This study analyses the tax deductibility of a contingent liability, where the contingent liability has been transferred from the seller to the purchaser in a sale of an entity as a going concern and the purchase price has been reduced to compensate for the transfer of the contingent liability. The deductibility of the contingent liability was first assessed in terms of the provisions of the Act (sections 11(a), 23(g) and 23(e)) and associated case law. The decision in the Ackermans case and its preceding Income Tax Case 1839 was then analysed in order to establish the principles arising from the decisions. Finally the proposals in the Draft Taxation Laws Amendment Bill, 2011, and the subsequent Discussion Document issued by the South African Revenue Service were discussed. The analysis revealed the continuing confusion surrounding the status quo, thus demonstrating the importance of legislative intervention to provide guidelines for taxpayers.
- Full Text:
- Date Issued: 2015
- Authors: Staude, Daylan
- Date: 2015
- Subjects: Sale of business enterprises -- Taxation -- South Africa , Sale of business enterprises -- Law and legislation -- South Africa , Tax deductions -- South Africa , Contingent liabilities (Accounting) -- Taxation -- South Africa
- Language: English
- Type: Thesis , Masters , MCom
- Identifier: vital:918 , http://hdl.handle.net/10962/d1017544
- Description: The sale of an entity as a going concern has a number of tax consequences for both the purchaser and the seller. The tax deductibility of a contingent liability upon its transfer from the seller to the purchaser, where the selling price has been reduced by the value of the contingent liabilities transferred, remains uncertain following the decision in Ackermans Ltd v Commissioner for the South African Revenue Service. An expense is either deductible under a specific section of the Income Tax Act, 58 of 1962, or under the general expense provisions in terms of sections 11(a) and 23(g). The Act does not contain a specific section relating to contingent liabilities and therefore a contingent liability will need to be considered for deduction under these sections. The Act further disallows an expense as a deduction under section 23(e), where a reserve is created (for example a leave pay provision). This study analyses the tax deductibility of a contingent liability, where the contingent liability has been transferred from the seller to the purchaser in a sale of an entity as a going concern and the purchase price has been reduced to compensate for the transfer of the contingent liability. The deductibility of the contingent liability was first assessed in terms of the provisions of the Act (sections 11(a), 23(g) and 23(e)) and associated case law. The decision in the Ackermans case and its preceding Income Tax Case 1839 was then analysed in order to establish the principles arising from the decisions. Finally the proposals in the Draft Taxation Laws Amendment Bill, 2011, and the subsequent Discussion Document issued by the South African Revenue Service were discussed. The analysis revealed the continuing confusion surrounding the status quo, thus demonstrating the importance of legislative intervention to provide guidelines for taxpayers.
- Full Text:
- Date Issued: 2015
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