A research report submitted to the Faculty of Commerce, Law and Management, University of the Witwatersrand, Johannesburg, in partial fulfilment of the requirements for the degree of Master of Commerce (specializing in Taxation) Johannesburg 2015 / Due to the vast number of groups of companies having many subsidiaries that are no longer viable from an economic perspective or that no longer gain the tax benefit that they were first created to achieve, there are many group restructurings occurring. These restructurings are to potentially simplify the group structure as well as achieve the maximum tax benefit. This research report will analyse how groups may be restructured in line with the provisions of the Income Tax Act (‘the Act’) as it stands currently by looking back at how restructurings were dealt with in the past and how that has now evolved. The research discusses the corporate rollover relief provisions that may be applied in order to simplify the restructuring process which is commonly used in today’s practice. The research suggests that there are many different ways to restructure a group in order to gain the maximum amount of benefit from a tax perspective. Key Words: branch, capital gains tax (CGT), corporate income tax, corporate rollover relief, deregistration, foreign tax resident, general anti-avoidance rules (GAAR), liquidation, partnership, restructure, value-added tax.

This study investigates the impact of aspects of tax design on the operating costs of the tax system. The thesis focuses on the Australian and UK regimes for taxing the capital gains of individuals. It contends that the compliance burden faced by personal taxpayers and the administrative costs incurred by revenue authorities are directly influenced by the design of the capital gains tax ('CGT') regimes in each country. The study bridges the divide between theoretical analysis of CGT and empirical studies on tax operating costs. It uses a hybrid research design to test a series of hypotheses that emerge from a review of the literature and the experience of the researcher. It combines a technical analysis of the relevant Australian and UK legislative provisions (including an analysis of the policy and other background data that underpins those provisions) with empirical research on the views and experience of practitioners who are responsible for the operation of the legislation in the two countries. The results obtained from this combined methodology indicate that the operating costs of taxing capital gains in Australia and the UK are directly affected by the design of the legislative provisions. Moreover, the study outcomes indicate that operating costs in both countries are high (on a number of comparative measures), have not reduced over time, and are both horizontally and vertically inequitable. The research indicates that the primary factors that cause the high operating costs include the complexity of the legislation and the frequency of legislative change, together with record-keeping and valuation requirements. The thesis identifies specific legislative changes that would address operational cost concerns. These include the phasing out of the 'grandfathering' exemption together with the introduction of an annual exempt amount, and the rationalisation of business concessions in Australia; and the abolition of taper relief and its possible replacement with a 50% exclusion in the UK. More importantly, it seeks a more principled approach to the taxation of capital gains in both countries, and emphasises that legislative change can and should only be enacted with a full and clear understanding of the operating cost implications of that change.

本文以Sandmo引進勞動供給的租稅逃漏模型為基礎，以是否具有其他所得來區別社會上的富人或窮人，富人可以在勞動市場中投入勞動供給賺取勤勞所得，或是將勞動供給投注在以其他所得做投資的投資行為上，賺取資本利得；但是窮人只能將其勞動供給投注在勞動市場中賺取勤勞所得，在雙方決定勞動供給以追求效用極大化下，可決定彼此的所得差距。 由於所得稅具有所得重分配的功能，因此我們首先比較在不同所得稅制下的所得差距，以得知所得稅是否達成其重分配功能。結果是：僅課徵勤勞所得稅時的所得差距會大於未課稅時的所得差距，勤勞所得稅反而使所得情形惡化，因為富人可藉由移轉勞動供給的方式規避稅負；而同時課徵勤勞所得稅及資本利得稅後之所得差距會小於僅課徵勤勞所得稅時的所得差距，代表資本利得稅可有效改善所得分配惡化的現象。 政府除了可以用所得稅的手段改善所得分配外，也可以以移轉性支出的方式達到相同目的。第一個情況是假設目前僅課徵勤勞所得稅，所得差距情形惡化，當政府決定將全國所收取的勤勞所得稅做為移轉性支出平均分發給窮人時，會得到不一定可以改善所得差距惡化現象的結果，必須視窮人對消費和休閒的替代彈性，以及替代效果與所得效果的大小而定。第二個情況是假設目前同時課徵勤勞所得稅及資本利得稅，並以富人所支付的資本利得稅做為移轉性支出平均分發給窮人，此時的移轉性支出能夠進一步改善所得差距惡化的情形。由以上兩段可知，若政府要有效地改善所得差距惡化的情形，最好的辦法是課徵資本利得稅，並將資本利得稅做為移轉性支出的財源。 / In this paper we use a Sandmo’s (1981) type tax evasion model to discuss the effects of proportional income taxation on income distribution among the riches and the poor. The riches are different from the poor in that only the former have exogenous income which can be invested to obtain capital gains. Therefore, while the riches choose between allocating their time to make labor income or to make capital gains, the poor can only attribute their time to making labor income. The tax system treats labor income and capital gains differently. The income distribution among the riches and the poor is determined by the difference in total incomes. We first show that when only labor incomes are taxed, the income tax worsens the income distribution as compared to the income distribution when there is no income tax. In other words, an income tax system with preferential treatments on capital gains is detrimental to income distribution. This result is intuitive because the riches can switch their labor supply from making labor income to making capital gains for tax avoidance, while the poor do not get to do so. An income tax system is beneficial to income distribution when capital gains are taxed at the same rate as labor income. Second we discuss the role of income transfer program on the income distribution and show that if the government uses labor income tax as the only financial source for the transfer, the effect of such income transfers on income distribution is ambiguous. It is decided by the magnitude of the elasticity of substitution between consumption and leisure, and the net effect of the substitution and the income effects. To improve income distribution, the best scenario is to use tax revenues from capital gains as the financial source of income transfer.

Olika aktörer på fastighetsmarknaden har svårigheter att värdesätta kommersiella fastigheter på grund av den minskade transparensen på marknaden. Den minskade transparensen är ett resultat av att färre fastigheter överlåts genom köpehandling idag. Syftet med denna studie är att skapa en ökad förståelse på fastighetsmarknaden och på så vis underlätta för olika aktörer på fastighetsmarknaden att genomföra marknadsanalyser. Målet är att utreda varför vissa bolag väljer att överlåta sina fastigheter med köpehandling istället för att överlåta fastigheter genom att paketera den i ett dotterbolag. Två rättsfall har studerats för att få rättsväsendets bedömningar. Genom rättsfallen kunde det konstateras att det råder en viss osäkerhet i hur beskattningen ska genomföras vid fastighetsöverlåtelser. Denna osäkerhet kan leda till att bolagen väljer att överlåta fastigheterna genom köpehandling där rättsläget är mycket tydligare.   För att utreda varför bolag väljer att överlåta kommersiella fastigheter genom köpehandling har en intervjustudie genomförts. Intervjustudien påvisade att bolagens val av överlåtelseform är beroende av de för- och nackdelar samt de skattemässiga konsekvenser som överlåtelsen medför. Intervjustudien visar även att enklare överlåtelseprocesser föredras av bolagen samt att de säljande bolagen vill uppnå en ekonomisk vinning genom överlåtelserna av fastigheterna.   Slutsatsen är att säljarens val av överlåtelseform är beroende på utfallet av kalkyleringsmetoden, köparens påverkan på överlåtelseformen samt hur komplicerad överlåtelseprocessen får vara. Den ökade transparensen som överlåtelser genom köpehandling bidrar till gör att de olika aktörernas marknadsanalyser på fastighetsmarknaden kan förenklas och bli mer tillförlitliga. Utöver detta avser regeringen att tillsätta en utredning angående skatteplanering i samband med då fastigheter paketeras i bolag. Beroende på vad regeringens utredning får för utfall kan antalet överlåtelser på fastighetsmarknaden ändras vilket skulle kunna vara intressant att undersöka i en framtida studie. / Different participants in the real estate market have difficulty in valuing commercial real estate due to reduced market transparency. The reduced transparency is a result of fewer properties being transferred by way of document of purchase today. The purpose of this study is to create a better understanding of the property market and be able to provide market participant with an improved understanding how to analyze this market. The objective is to investigate why some companies choose to sell properties by way of document of purchase instead of transferring the property by using a limited company structure. Two legal cases have been reviewed for judicial assessments. The court cases analysis showed the degree of turnover of property transfers can lead to uncertainty in terms of possible tax implications. This uncertainty might lead to companies choosing to transfer properties by way of document of purchase due to the much clearer legal position.   An interview study has been conducted to investigate why companies transfer commercial properties through the use of purchase document. The study showed that companies’ choice of transfer form is dependent on the advantages and disadvantages of the form together with possible tax implications. The interview study also showed a simple transfer process is preferred together with financial gains when selling properties.   The conclusion is that the seller’s preferred choice of transfer form is dependent on the outcome of the project models, the purchasers’ impact and how complicated the transfer process may be. The increased level of transparency achieved by using document of purchase makes it easier for participants in the real estate market to conduct market analysis and also to make the results more reliable. In addition to this the Swedish government intends to launch an investigation into potential effects of tax planning in connection with the use of limited corporate structures. The number of transferals in the property market could potentially change dependent on the outcome of the government’s investigation and if so this could be an interesting topic for a future study.

The tax world as we knew it was turned upside down on 13 September 2007 when the Supreme Court of Appeal (“SCA”) announced its decision to deem the right to use an interest-free loan as an amount that accrued to the taxpayers in the case Commissioner for South African Revenue Service v Brummeria Renaissance (Pty) Ltd and others 69 SATC 205. The findings of SCA brought about a “great deal of consternation in the business world” (Loubser, 2007:20). Due to the controversy as a result of this case, SARS drafted an Interpretation Note that illustrates the reasoning and tax treatment of an interest-free loan. On 30 June 2010, Interpretation Note No 58 was finally issued by SARS, providing guidance with regard to “an amount” that “accrues” to a taxpayer for the purposes of the gross income definition. This Interpretation Note will have a significant impact on a number of taxpayers. The purpose of this study is to understand the nature of an interest-free loan and identify its tax implications. The methodology followed in this study will be that of qualitative research. This will be conducted through analyzing the nature of a loan, specifically an interest-free loan, the gross income definition, including the value and timing of such amount, and whether a deduction may be claimed in respect of an interest-free loan. Notwithstanding the above, the study also includes an investigation of other taxes inter alia capital gains tax, donations tax, value-added tax, secondary tax on companies and newly proposed dividends tax. / Thesis (M.Com. (Tax))--North-West University, Potchefstroom Campus, 2011.

The tax world as we knew it was turned upside down on 13 September 2007 when the Supreme Court of Appeal (“SCA”) announced its decision to deem the right to use an interest-free loan as an amount that accrued to the taxpayers in the case Commissioner for South African Revenue Service v Brummeria Renaissance (Pty) Ltd and others 69 SATC 205. The findings of SCA brought about a “great deal of consternation in the business world” (Loubser, 2007:20). Due to the controversy as a result of this case, SARS drafted an Interpretation Note that illustrates the reasoning and tax treatment of an interest-free loan. On 30 June 2010, Interpretation Note No 58 was finally issued by SARS, providing guidance with regard to “an amount” that “accrues” to a taxpayer for the purposes of the gross income definition. This Interpretation Note will have a significant impact on a number of taxpayers. The purpose of this study is to understand the nature of an interest-free loan and identify its tax implications. The methodology followed in this study will be that of qualitative research. This will be conducted through analyzing the nature of a loan, specifically an interest-free loan, the gross income definition, including the value and timing of such amount, and whether a deduction may be claimed in respect of an interest-free loan. Notwithstanding the above, the study also includes an investigation of other taxes inter alia capital gains tax, donations tax, value-added tax, secondary tax on companies and newly proposed dividends tax. / Thesis (M.Com. (Tax))--North-West University, Potchefstroom Campus, 2011.

The present paper is a thorough study on the recent developments of excise tax in Peru. It begins by showing the most recent regulatory treatment on this tax, then focusing on the current system of it, analyzing the most relevant aspects of the excise tax, aiming to be a contribution to the future improvement of this tax. / El presente artículo es un estudio minucioso de la evolución reciente del Impuesto de Alcabala en Perú. Parte de presentar los más recientes tratamientos normativos de dicho impuesto, para luego centrarse en el actual régimen del mismo, analizando los aspectos más relevantes del Impuesto de Alcabala, procurando servir de aporte para la futura mejora de este tributo.

M.Comm. / The first objective of this dissertation is to establish whether wealth or capital taxes are relevant to South Africa. If the answer is yes, the further objective is to identify the various forms of capital and wealth taxes in order to determine which form of wealth or capital tax would be suitable in South Africa in the future (refer chapter 2). The second objective, once the form of capital tax for a future South Africa is identified, is to determine which assets or, in other words, which property will be subjected to such a tax (chapters 3-5). The third objective is to analyse the recommendations contained in the fourth interim report of the Katz Commission of Inquiry into certain 3 aspects of the tax structure of South Africa (hereafter, referred to as the Katz Commission) and to examine the effect of these recommendations on the inclusion of property in the deceased's estate which will be subjected to such a tax (chapter 5). The fourth objective is to provide the reader with two diagrams which will enable such person to determine: whether a deceased person's estate will be subject to estate duty in terms of the current Act 45 of 1955, as amended (hereafter, referred to as the Act); and what an estate consists of (chapter 6). The fifth objective is to provide the reader with a comprehensive alphabetical property checklist to enable such person to determine whether a specific asset should be included in the estate of a deceased person (chapter 6).

In his 2012 Budget Review, the Minister of Finance, Pravin Gordhan acknowledged that the introduction of the "new" Companies Act had given rise to certain anomalies in relation to tax and subsequently announced that the South African government would undertake to review the nature of company mergers, acquisitions and other restructurings with the view of possibly amending the Income Tax Act and/or the "new" Companies Act, to bring the two legislations in line with one another. These anomalies give rise to the present research. The literature reviewed in the present research revealed and identified the inconsistencies that exist between the "new" Companies Act, 71 of 2008 and the Income Tax Act, 58 of 1962, specifically the inconsistencies that exist in respect of the newly introduced amalgamation or merger provisions as set out in the "new" Companies Act. Moreover, this research was undertaken to identify the potential tax implications insofar as they relate to amalgamation transactions and, in particular, the potential tax implications where such transactions, because of the anomalies, fall outside the ambit section 44 of the Income Tax Act, which would in normal circumstances provide for tax "rollover relief". In this regard, the present research identified the possible income tax, capital gains tax, value-added tax, transfer duty tax and securities transfer tax affected by an amalgamation transaction, on the assumption that the "rollover relief" in section 44 of the Income Tax Act does not apply.

The capital maintenance rules stem from the English company law and were primarily aimed at protecting the rights of a company’s creditors. Before the introduction of the Companies Amendment Act 37 of 1998, a company was prohibited from purchasing its own shares. After this legislation was passed, a company was able to do so, provided that it satisfied the solvency and liquidity test and also complied with the new statutory provisions set out by sections 85 to 89 of the Companies Act 61 of 1973. Section 48 of the Companies Act 71 of 2008 now regulates the acquisition by a company of its own shares, as well as the acquisition of shares in its holding company by a subsidiary company. The above actions also fall under the ambit of a “distribution” as defined in the Act and therefore need to satisfy the requirements of section 46 of the Act as well. Unlike its predecessor, the provisions in the new Act are very broad and devoid of guidelines. The emphasis is placed on companies satisfying the principles of solvency and liquidity. Non-adherence to these provisions gives rise to the personal liability of the company’s directors. The provisions of section 48 do not apply where a dissenting shareholder exercises his appraisal rights in terms of section 164 of the new Act, or where a company redeems redeemable securities. These exceptions do, however, still amount to “distributions” and will accordingly need to satisfy the requirements contained in section 46 of the Act. Redeemable securities were initially not exempted from the provisions of section 48. This would potentially have given rise to a situation where a company could approach a court in terms of section 48(6) to reverse a redemption of its securities. It would have had dire consequences for financing by way of redeemable securities. In terms of the Companies Amendment Act 3 of 2011 redeemable securities are now specifically exempted from the provisions of section 48. In terms of the new Act a subsidiary company is allowed to purchase shares in its holding company to a maximum of 10% in the aggregate of the issued shares of any share class, provided that no voting rights attached to such shares may be exercised. The new Act fails to properly address some of the issues regarding the “round-tripping” of dividends and the declaration of a dividend in specie that were already identified as far back as 2001. Where the consideration for a repurchase constitutes a “dividend” as defined in the Income Tax Act 58 of 1962, the company will be liable to pay secondary tax on companies in respect thereof. If a distribution does not constitute a dividend, capital gains tax is payable with regard to it. Share repurchases are allowed in terms of Canadian corporate law after the legislative reform which occurred in that country during the 1970’s. The Canadian Business Corporations Act contains provisions that bear a striking resemblance to the provisions of the new Act adopted in South Africa. Whilst the basis and rationale behind the new corporate legislation cannot be faulted, a host of issues and concerns still remain. The unfortunate consequence is that the new Act lacks transparency and is fraught with clumsy errors. Copyright / Dissertation (LLM)--University of Pretoria, 2012. / Mercantile Law / unrestricted