M.Comm. / The purpose of this study is to determine the meaning of 'arm's length transactions' as stated in the Income Tax Act, Act 58 of 1962. Although the meaning of arm's length transactions have been properly interpreted by our courts, no guidelines or policy documents pertaining to this concept, have been issued by the South African Revenue Services in as far as it relates to transfer pricing. Several of the developed countries have adopted the guidelines of the Organisation of Economic Co-ordination and Development regarding transfer prices and the arm's length principle in respect of international transactions. The substance of arm's length transactions : The concept of arm's length is not easy to state: it is not unlike the proverbial elephant which could easily be recognised, but could not be defined. It can be defined by reference to the terms of the transaction in question, or by reference to the relationship between the parties to it, or by reference to both of these factors. Normally, parties enter into an arm's length transaction when each party: • Is independent of the other; and • Strives to get the utmost possible advantage from the transaction for himself. The effects of an arm's length transaction are: • The rights and obligations created by the transaction are more likely to be regarded as normal than abnormal; and • The means and manner employed in entering into the transaction are more likely to be normal than abnormal. It is clear that the meaning of arm's length is defined, but that the effect of such transactions will depend on the facts of each case. What may be normal in one case can be abnormal in another depending on the underlying facts. Although South African transfer pricing legislation includes the arm's length principle in respect of international transactions, legislation on transfer pricing should be more clear as to what is normal or abnormal in respect of international transactions.

Thesis (MAcc)--University of Stellenbosch, 2009. / ENGLISH ABSTRACT: In November 2006 section 103(1) of the Act was abolished and replaced by a new Part IIA, containing sections 80A to 80L, which targets impermissible tax avoidance arrangements. Section 80A(c)(ii) introduced a new concept to the South African tax law: a misuse or abuse of the provisions of the Act, including Part IIA thereof. The objective of this study was to establish the origin, meaning, application and effect of section 80A(c)(ii) of the Act. The evolution of section 80A(c)(ii) was therefore examined where after the enacted version was analyzed. It was essential to determine the origin of section 80A(c)(ii) in order to establish some point of reference from which inferences could be drawn as to the possible application and effect thereof. Case law, practice statements and articles relating to its proposed root was then examined. A ‘misuse or abuse’ of a provision, it was found, implies, frustrating or exploiting the purpose of the provision. This contention was confirmed by existing Canadian precedent. Such an interpretation, however, has a strong resemblance to the words in which the draft version of section 80A(c)(ii) was couched. It is therefore in contrast to the presumption that different words (in the enacted version) imply a different meaning. The precise meaning of the words ‘misuse or abuse’ is thus still elusive. It was established that section 80A(c)(ii) has its roots in section 245 of the Canadian Act. Section 245(4) was regarded as an effective comparative to section 80A(c)(ii) as it also contained a so-called misuse or abuse rule. The application of this rule in the Canadian tax environment required the following process: - Interpret (contextually and purposively) the provisions relied on by the taxpayer, to determine their object, spirit and purpose. - Determine whether the transaction frustrates or defeats the object, spirit or purpose of the provisions. Section 245(4) had the effect of reviving the modern approach (a contextual and/or purposive theory) to the interpretation of statutes in Canada. Reference to the ‘spirit’ of a provision (above) was found not to extend the modern approach to statutory interpretation: it does not require of the court to look for some inner and spiritual meaning within the legislation. As section 245(4) was regarded as an effective comparative to section 80A(c)(ii) it was contented that it would have a similar effect, than that of its Canadian counterpart, on the approach to statutory interpretation in South Africa. However, it was established that a modern approach to statutory interpretation was already authoritative in South Africa. This finding led the author to the conclusion that section 80A(c)(ii) could at best only reinforce the case for applying such an approach. Such a purpose for section 80A(c)(ii) was however found to be void in the light of the Constitution of the Republic of South Africa, which was enacted in 1996, and provides a sovereign authority for the application of the modern approach. It was also found that the practical burden of showing that there was a ‘misuse or abuse of the provisions of this Act (including the provisions of this Part)’ will rest on the shoulders of the Commissioner, notwithstanding section 82 of the Act. / AFRIKAANSE OPSOMMING: Artikel 103(1) van die Inkomstebelastingwet is herroep in November 2006 en vervang deur Deel IIA, bestaande uit artikels 80A tot 80L, wat daarop gemik is om ontoelaatbare belastingvermydingsreëlings te teiken. Artikel 80A(c)(ii) het ‘n nuwe konsep in die Suid-Afrikaanse Inkomstebelastingreg ingebring: ‘n misbruik of ‘n wangebruik van die bepalings van die Wet, insluitende Deel IIA. Die doel van hierdie studie was om die oorsprong, betekenis, toepassing en uitwerking van artikel 80A(c)(ii) vas te stel. Die ontwikkeling van artikel 80A(c)(ii) is daarom ondersoek waarna die verordende weergawe daarvan geanaliseer is. ‘n Sleutelaspek van die analise was om die oorsprong van artikel 80A(c)(ii) vas te stel. Hierdie oefening het ‘n verwysbare bron daargestel waarvan afleidings rondom die moontlike toepassing en uitwerking van artikel 80A(c)(ii) gemaak kon word. Hofsake, praktyknotas en artikels rakende die voorgestelde oorsprong is vervolgens ondersoek. Daar is vasgestel dat ‘n ‘misbruik of wangebruik’ van ‘n bepaling neerkom op die frustering of uitbuiting van die doel van ‘n bepaling. Hierdie bewering is bevestig deur bestaande Kanadese presedent. So ‘n interpretasie is egter soortgelyk aan die woorde waarin die konsepweergawe van artikel 80A(c)(ii) uitgedruk is. Dit is daarom in teenstelling met die vermoede dat ‘n wysiging van die woorde (in die verordende weergawe) ‘n gewysigde betekenis impliseer. Die presiese betekenis van die woorde ‘misbruik of wangebruik’ is dus steeds ontwykend. Daar is bevind dat artikel 80A(c)(ii) waarskynlik sy ontstaan in artikel 245 van die Kanadese Inkomstebelastingwet gehad het. Artikel 245(4) van die Kanadese Inkomstebelastingwet is beskou as ‘n effektiewe vergelykende artikel vir artikel 80A(c)(ii), aangesien dit ook oor ‘n sogenaamde misbruik of wangebruik reël beskik. Die toepassing van hierdie reël in die Kanadese belastingmilieu vereis die volgende werkswyse: - Interpreteer (kontekstueel en doeldienend) die bepalings waarop die belastingpligtige steun, ten einde die oogmerk, gees en doel daarvan vas te stel. - Bepaal of die transaksie, deur die belastingpligtige aangegaan, die oogmerk, gees of doel van die bepalings frustreer. Artikel 245(4) het aanleiding gegee tot die herstel van die moderne benadering (‘n kontekstuele en/of doeldienende teorie) tot die interpretasie van wetgewing in Kanada. Daar is bevind dat die verwysing na die ‘gees’ van ‘n bepaling (hierbo) nie aanleiding gee tot die uitbreiding van die moderne benadering tot wetsuitleg nie: dit vereis nie dat die hof moet soek na die innerlike of geestelike betekenis van die wetgewing nie. Aangesien artikel 245(4) as ‘n effektiewe vergelykende artikel vir artikel 80A(c)(ii) beskou is, is daar aangeneem dat dit ‘n soortgelyke uitwerking, as sy Kanadese eweknie, op wetsuitleg in Suid Afrika sal hê. By nadere ondersoek is daar egter bevind dat ‘n moderne benadering tot wetsuitleg alreeds gesaghebbend in Suid Afrika is. Hierdie bevinding het die skrywer tot die gevolgtrekking gebring dat artikel 80A(c)(ii), in beginsel, slegs die saak vir die moderne benadering tot wetsuitleg in Suid Afrika sal versterk. Indien hierdie die doel is wat die wetgewer gehad het met die verordening van artikel 80A(c)(ii), sal dit egter niksseggend wees in die lig van die Grondwet van die Republiek van Suid Afrika, wat verorden is in 1996, en ‘n oppermagtige gesag bied vir die moderne benadering tot wetsuitleg. Daar is ook vasgestel dat die onus op die Kommissaris rus om te bewys dat daar ‘n ‘misbruik of wangebruik van die bepalings van hierdie Wet (waarby ingesluit die bepalings van hierdie Deel)’ was, ondanks artikel 82 van die Wet.

Thesis (MAcc)--Stellenbosch University, 2010. / ENGLISH ABSTRACT: The Income Tax Act, Act 58 of 1962 (‘the Act’) currently defines a permanent establishment in section 1. The definition of a permanent establishment in the Act refers to article 5 of the Model Tax Convention on Income and on Capital of the Organisation for Economic Co- Operation and Development. The existence of a permanent establishment in a tax jurisdiction determines the right of the jurisdiction to tax the profits of the permanent establishment. The concept foreign business establishment was inserted into section 9D of the Act by clause 10(1)(a) of the Revenue Laws Amendment Act, Act 59 of 2000. Section 9D is an antiavoidance provision, which determines that certain foreign-sourced income generated by South African controlled foreign companies are subject to tax in South Africa. The concept foreign business establishment is one of the exclusions from the anti-avoidance provisions in section 9D. The Revenue Laws Amendment Act, Act 59 of 2000, replaced all references to the concept permanent establishment with a reference to the newly introduced concept foreign business establishment in section 9D(9)(b) of the Act. The Explanatory Memorandum on the Revenue Laws Amendment Bill, 2000 (SARS 2000:1-12) does not provide a reason for the replacement of the concept permanent establishment. The objective of this study was to analyse and compare the concepts permanent establishment and foreign business establishment in order to make recommendations regarding the required additions and amendments to replace the concept foreign business establishment with the internationally recognised and accepted concept permanent establishment. The proposed replacement of the concept foreign business establishment with an internationally recognised and accepted tax concept will enhance the international compatibility of the Act. The use of an internationally recognised and accepted tax concept will provide clarity and certainty regarding the tax implications of section 9D(9)(b) for those affected by it. It was found that the concepts permanent establishment and foreign business establishment are used in different contexts within the Act. The concepts also apply to different types of taxpayers in different situations. The two concepts have, however, the same objective, being the identification of criteria for the existence of legitimate and substantive business activities in the foreign tax jurisdiction. A comparison between the definitions of the two concepts reveals that there are various components in the definitions with the same wording and meaning. After a detailed comparison between the two definitions it was found that, subject to some suggested additions and amendments, the internationally recognised and accepted concept permanent establishment can replace the concept foreign business establishment in section 9D(9)(b) of the Act without having a material impact on the objective of section 9D(9)(b). This replacement is possible due to the mutual objective of and similar components contained in the definitions of the concepts permanent establishment and foreign business establishments. / AFRIKAANSE OPSOMMING: Die Inkomstebelastingwet, Wet 58 van 1962 (‘die Wet’) definieer ’n permanente saak in artikel 1. Die definisie van ’n permanente saak verwys na artikel 5 van die ‘Model Tax Convention on Income and on Capital of the Organisation for Economic Co-Operation and Development’. Die bestaan van ’n permanente saak in ’n belastingjurisdiksie bepaal die reg van die belastingjurisdiksie om die winste van die permanente saak te belas. Die begrip buitelandse besigheidsaak is deur artikel 10(1)(a) van die Wysigingswet op Inkomstewette, Wet 59 van 2000 in die Wet ingesluit. Artikel 9D is ’n teenvermydingsbepaling wat bepaal dat sekere inkomste vanaf ’n buitelandse bron gegenereer deur ’n Suid-Afrikaans beheerde buitelandse maatskappy in Suid-Afrika belas word. Die begrip buitelandse besigheidsaak is een van die uitsluitings van die teenvermydingsbepaling in artikel 9D. Alle verwysings in artikel 9D(9)(b) na die begrip permanente saak is deur die Wysigingswet op Inkomstewette, Wet 59 van 2000, vervang met ’n verwysing na die nuwe begrip buitelandse besigheidsaak. Die ‘Explanatory Memorandum on the Revenue Laws Amendment Bill, 2000’ (SARS 2000:1-12) verskaf nie ’n rede vir die vervanging van die begrip permanente saak nie. Die doel van die studie was om die begrippe permanente saak en buitelandse besigheidsaak te vergelyk sodat voorstelle gemaak kan word rakende die nodige byvoegings en wysings om die begrip buitelandse besigheidsaak met die internasionaal aanvaarde en erkende begrip, permanente saak, te vervang. Die voorgestelde vervanging van die begrip buitelandse besigheidsaak met ’n internasionaal aanvaarde en erkende begrip sal die internasionale verenigbaarheid van die Suid Afrikaanse wetgewing bevorder. Die gebruik van ’n begrip wat internasionaal aanvaar en erken word, sal sekerheid en duidelikheid bewerkstellig vir diegene wat deur die artikel geaffekteer word. Daar is bevind dat die begrippe permanente saak en buitelandse besigheidsaak in die Wet in verskillende verbande gebruik word. Die begrippe is ook van toepassing op verskillende belastingbetalers in verskillende situasies. Die twee begrippe het egter dieselfde doelwit naamlik die identifisering van kriteria vir die bestaan van wesenlike en volwaardige besigheidsaktiwiteite in die buitelandse belastingjurisdiksie. ’n Vergelyking tussen die definisies van die twee begrippe toon dat verskeie komponente van die definisies dieselfde woorde en betekenis bevat. Na ’n detail vergelyking van die twee begrippe is daar bevind dat, onderhewig aan sommige voorgestelde byvoegings en wysigings, die internasionaal erkende en aanvaarde begrip permanente saak die begrip buitelandse besigheidsaak in artikel 9D(9)(b) van die Wet kan vervang. Die vervanging is moontlik weens die gemeenskaplike doelwit en soortgelyke komponente in die definisies van die begrippe permanente saak en buitelandse besigheidsaak.

M.Com. (Taxation) / Please refer to full text to view abstract

No abstract available. / Thesis (M.Com.)-University of KwaZulu-Natal, 2005.

The aim of this collection of essays is to provide a detailed and critical commentary on and analysis of the legislation and case law relating to the impact of the 'business purposes test' on section 103(1) of the Income Tax Act. The Income Tax Act No. 58 of 162 and case law that are the subject of these essays were promulgated on or before 28 February 1999. / Thesis (M.Acc.)-University of Natal, Durban, 1999.

M.Comm. / Herstelwerk vorm 'n belangrike gedeelte van die koste-struktuur van ondernemers. Natuurlike verwering en agteruitgang het tot gevolg dat herstelwerk aan sekere bates gedoen word. Meeste persone het 'n persepsie wat herstelwerk verteenwoordig. Die persepsie van wat ondernemers beskou as herstelwerk is nie noodwendig in ooreenstemming met artikel 11(d) van die Wet nie asook toetste wat deur die howe neergele is nie. Ten einde 'n sinvolle uiteensetting te verskaf was dit nodig om die onderwerp in sinvolle komponente te verdeel. Die inleidende paragraaf tot artikel 11 is eers ontleed aangesien dit ook die inleidende paragraaf tot artikel 11(d) – wat handel oor herstelwerk -verteenwoordig. Vervolgens is artikel 11(d) van die Wet ontleed ten einde die studie in konteks te plaas. Die begrip van herstelkoste is daarna ontleed en 'n onderskeid is gemaak met faktore wat kan dui op 'n verbetering. Die invloed van koste op beslissings is ook ondersoek. Met betrekking tot die inleidende paragraaf van artikel 11 is gevind dat "belasbare inkomste" bereken word deur van "bruto inkomste" vrystellings (soos in artikel 10 van die Wet uiteengesit) of te trek en daarna die ander aftrekkings soos in die Wet uiteengesit. Een van hierdie aftrekkings is herstelwerk wat in artikel 11(d) van die Wet uiteengesit word en die onderwerp van hierdie studie is. Aangesien hierdie "belasbare inkomste" deur 'n "persoon" verdien moet word is hierdie begrip ontleed. Daar is gevind dat die begrip "persoon" 'n afdelingsraad, munisipale raad, dorpsbestuur of derglike gesag; 'n maatskappy (of beslote korporasie); enige liggaam van persone, 'n natuurlike persoon; 'n vereniging van persone; die boedel van 'n oorlede persoon; 'n insolvente boedel en 'n trust insluit. Voordat 'n aftrekking toegestaan kan word om "belasbare inkomste" te bereken moet 'n "persoon" 'n bedryf "beoefen". Daar is vasgestel dat beoefen `n daadwerklike optrede moet wees en dat die "persoon" homself daarop moet toele. In die studie is gevind dat die begrip "bedryf' baie wyd is en nie uitputtend is nie. Daar is wel 'n omskrywing in artikel 1 tot die Wet maar die vraag of 'n bedryf beoefen word moet op grond van die feite beslis word. Met betrekking tot artikel 11(d) is eerstens gevind dat "onkoste" en "uitgawes" dieselfde betekenis het. Daar is vervolgens bevind dat daar 'n onvoorwaardelike regsaanspreeklikheid in die jaar van aanslag moet wees voordat die onkoste as 'n aftrekking toegelaat sal word. Alhoewel daar nie hofsake is wat handel oor die betekenis van "eiendom" ingevolge die spesifieke bepalings van artikel 11(d) nie word die afleiding gemaak dat dit verwys na geboue. Dit is 'n vereiste dat die eiendom of vir bedryfsdoeleindes geokkupeer moet word Of die eiendom moet in staat wees om inkomste voor te bring.

M.Com. (Taxation) / Please refer to full text to view abstract

Thesis (MComm)--University of Stellenbosch, 2004. / ENGLISH ABSTRACT: Despite the fact that transfer pricing legislation (i.e. section 31 of the Income Tax Act, 58 of 1962 (“the Act”) has been in force in South Africa since 1995, it has only been in the last three years that the South African Revenue Service (“SARS”) has embarked on a number of assessments of taxpayers’ cross border transactions with foreign group companies. In particular, the SARS targets taxpayers that have rendered cross border services (including financial assistance) to a foreign group company for no consideration and has assessed these taxpayers on the adjusted interest/ fee amounts. Since the burden of proof lies with the taxpayer to demonstrate that its cross border transactions with foreign group companies do not infringe the provisions of section 31(2) of the Act, this study provides taxpayers with guidance as to when its transactions would fall within the scope of application of section 31(2) of the Act and when the SARS would be excluded from applying the provision of section 31(2) of the Act. Following upon a critical analysis of the essential components of section 31(2) of the Act the following conclusions are drawn by the author: • If the taxpayer proves that it did not transact with a connected party (as defined in section 1 of the Act), or it did not supply goods or services in terms of an international agreement (as defined in section 31(1) of the Act), or its transfer price would be regarded as arm’s length, the Commissioner would be excluded from applying the provision of section 31(2) of the Act since all of the components to apply section 31(2) of the Act are not present. • The current view held by the South African Revenue Service and tax practitioners that transactions between a South African company and an offshore company, which are both directly or indirectly held more than fifty percent by an offshore parent company, are transactions between connected persons (as defined in 5 section 1 of the Act) is incorrect in law. Section 31 of the Act is not applicable to such transactions. • The Commissioner will be excluded from making a transfer pricing adjustment to a service provider’s taxable income where the following circumstances are present: o Where the cross border transaction with a connected party does not give rise to gross income, which is the starting point in the determination of taxable income, since the service provider agreed to render services for no consideration and was therefore not entitled to receive income (i.e. no receipt or accrual) and o Where the service provider can provide evidence that demonstrates that there was no practice of price manipulation as regards the transaction under review. / AFRIKAANSE OPSOMMING: Alhoewel oordragprysbeleid wetgewing (artikel 31 van die Inkomstebelastingwet 58 van 1962 (“die Wet”)) al sedert 1995 in Suid Afrika van krag is, het die Suid Afrikaanse Inkomstediens (“SAID”) eers werklik gedurende die laaste drie jaar begin om aanslae ten opsigte van belastingpligtiges se internasionale transaksies met buitelandse groepmaatskappye uit te reik. In die besonder teiken die SAID belastingpligtes wat dienste (insluitend lenings) aan buitelandse groepmaatskappye vir geen vergoeding lewer. Aangesien die bewyslas op die belastingpligtige rus om te bewys dat sy internasionale transaksies met buitelandse groepmaatskappye nie die bepalings van artikel 31(2) van die Wet oortree nie, word belastingpligtiges in hierdie studie van riglyne, wat aandui wanneer transaksies met buitelandse groepmaatskappye binne die omvang van artikel 31(2) van die Wet val asook onder welke omstandighede die SAID verhoed sal word om artikel 31(2) van die Wet toe te pas, voorsien. Na aanleiding van ‘n kritiese analise van die deurslaggewende komponente van artikel 31(2) van die Wet kom die skrywer tot die volgende gevolgtrekkings: • As die belastingpligte kan bewys dat hy nie met ‘n verbonde persoon (soos omskryf in artikel 1 van die Wet) handelgedryf het nie, of dat hy nie goedere of dienste in terme van ‘n internasionale ooreenkoms (soos omskryf in artikel 31(1) van die Wet) gelewer het nie, of dat sy oordragprys as arm lengte beskou kan word, sal die Kommissaris verhoed word om die bepaling van artikel 31(2) van die Wet toe te pas, aangesien al die komponente van artikel 31(2) van die Wet nie teenwoordig is nie. • Die huidige sienswyse van die SAID en belastingpraktisyns dat transaksies wat tussen ‘n Suid Afrikaanse maatskappy en ‘n buitelandse maatskappy plaasvind, waar ‘n buitelandse moedermaatskappy meer as vyftig persent van albei maatskappye se aandeelhouding (direk of indirek) hou, beskou kan word as 7 transaksies tussen verbonde persone (soos omskryf in artikel 1 van die Wet) is regstegnies nie korrek nie. Artikel 31(2) van die Wet is nie van toepassing op sulke transaksies nie. • Die Kommisaris sal onder die volgende omstandighede verhoed word om enige oordragprysaanpassing aan ‘n diensleweraar se belasbare inkomste te maak: o Waar die internasionale transaksie met ‘n verbonde persoon nie bruto inkomste (die beginpunt van ‘n belasbare inkomste berekening) voortbring nie, aangesien die diensleweraar ingestem het om dienste teen geen vergoeding te lewer, wat tot die gevolg het dat die diensleweraar nie geregtig is om inkomste te ontvang nie (dus geen ontvangste of toevalling) en o Waar die diensleweraar kan bewys dat die transaksie nie onderhewig aan prys manipulasie was nie.

Thesis (MAcc)--Stellenbosch University, 2011. / ENGLISH ABSTRACT: In February 2007 section 11D was inserted into the Income Tax Act 58 of 1962 as amended. The aim of the section was to encourage private-sector investment in scientific or technological research and development (R&D). This was an indirect approach by National Treasury to increase national scientific and technological R&D expenditure in order to complement government expenditure on the subject matter. Although section 11D provides generous income tax incentives, the interpretation thereof was found to be a hindrance in attaining the goal sought by National Treasury. This is due to the fact that this section demands a firm grasp of intellectual property (IP) law, principles of tax, and technology in general. This is clearly shown by the lapse in time (i.e. three years) between the passing of section 11D into law and the release of the South African Revenue Services’ (SARS) final interpretation of section 11D, i.e. Interpretation Note 50. The release of Interpretation Note 50 in August 2009 sparked wide-spread controversy among many a patent attorneys and tax consultants. The interpretation of the section by SARS was found by many to be so draconian that it destroyed the incentive entirely. The objective of this study is to provide greater clarity on the areas of section 11D which have been found to be onerous to taxpayers. Hence the meaning of “new” and “non-obvious” in the context of a discovery of information as eligible R&D activity1 was examined. Hereafter the ambit of the exclusion of expenditure on “management or internal business process”2 from eligibility for the incentive in the context of computer program development was examined. It was established that the meaning of “novel” and “non-obvious” as construed by IP jurisprudence could mutatis mutandis be adopted for purposes of interpreting section 11D(1) of the Income Tax Act. Therefore, information would be regarded as “new” if it did not form part of the state of the art immediately prior to the date of its discovery. The state of the art was found to comprise all matter which had been made available to the public (both in the Republic and elsewhere) by written or oral description, by use or in any other way. Information would also be regarded as non-obvious if an ordinary person, skilled in the art, faced with the same problem, would not have easily solved the problem presented to him by having sole reliance on his intelligence and what was regarded as common knowledge in the art at the time of the discovery. It was submitted that in construing the meaning of the “management or internal business process” exclusion, the intention of the lawgiver should be sought and given effect to. The Explanatory Memorandum issued on the introduction of section 11D states that the lawgiver’s intention with the section was to ensure that South Africa is not at a global disadvantage concerning R&D. The R&D tax legislation of Australia, the United Kingdom and Canada was therefore examined to establish the international bar set in this regard. SARS is of the view that the “management or internal business process” exclusion applies to the development of any computer program (with the said application) irrespective of whether the program is developed for the purpose of in-house use, sale or licensing. However, it was found that such a restrictive interpretation would place homebound computer development at a severe disadvantage when compared with the legislation of the above mentioned countries. In order to give effect to the intention of legislature, it was submitted that the exclusion provision should be construed to only include the development of computer programs for in-house management or internal business process use. Computer programs developed for the said application, but for the purpose of being sold or licensed to an unrelated third party, should still be eligible for the R&D tax incentive. / AFRIKAANSE OPSOMMING: Artikel 11D is gevoeg tot die Inkomstebelastingwet 58 van 1962 gedurende Februarie 2007. Die wetgewing het ten doel om privaatsektor investering in tegniese en wetenskaplike navorsing en ontwikkeling (N&O) aan te moedig. Nasionale Tesourie dra dus op ‘n indirekte wyse by tot die hulpbronne wat die regering op nasionale vlak aan tegniese en wetenskaplike N&O bestee in ‘n gesamentlike poging om N&O in Suid-Afrika te stimuleer. Artikel 11D hou op die oog af baie gunstige inkomstebelasting aansporings in. Dit wil egter voorkom asof die interpretasie daarvan as ernstige struikelblok dien in die bereiking van die doel wat Nasionale Tesourie voor oë gehad het. Dit kan toegeskryf word aan die feit dat die artikel ‘n wesenlike begrip van intellektuele eiendom (IE) wetgewing, belasting beginsels en tegnologie in die algemeen vereis. Die feit dat dit die Suid-Afrikaanse Inkomstebelastingdiens (SAID) ongeveer drie jaar geneem het om hul interpretasie (i.e. Interpretasienota 50) van die artikel te finaliseer dien as bewys hiervan. Die SAID het gedurende Augustus 2009, Interpretasienota 50 vrygestel. Die nota het wye kritiek ontlok by menigte IE prokureurs en belastingkonsultante. Daar is algemene konsensus dat die SAID se interpretasie so drakonies van aard is, dat dit enige aansporing wat die artikel bied, geheel en al uitwis. Die doel van hierdie studie is om die problematiese bepalings van die aansporingsartikel te verlig en groter sekerheid daaroor te verskaf. Gevolglik is die betekenis van “nuut” en “nie-ooglopend” soos van toepassing op ‘n ontdekking van inligting as kwalifiserende N&O aktiwiteit, bestudeer. Verder is die omvang van die bepaling wat besteding op “bestuur of interne besigheidsprosesse” uitsluit van kwalifikasie vir die aansporingsinsentief, bestudeer in die konteks van rekenaar programmatuur ontwikkeling. By nadere ondersoek is daar bevind dat die betekenis van “nuut” en “nie-ooglopend” soos uitgelê vir doeleindes van IE wetgewing mutatis mutandis aangeneem kan word vir die uitleg van artikel 11D(1)(a) van die Inkomstebelastingwet. Vervolgens word inligting as “nuut” beskou indien dit nie deel uitmaak van die stand van die tegniek onmiddellik voor die datum waarop dit ontdek is nie. Die stand van die tegniek vir die bepaling van nuutheid behels alle stof wat reeds aan die publiek beskikbaar gestel is (hetsy binne die Republiek of elders) by wyse van skriftelike of mondelinge beskrywing, deur gebruik of op enige ander wyse. Inligting word as nie-ooglopend beskou indien ‘n gewone werker wat bedrewe is in die tegniek en gekonfronteer is met dieselfde probleem, nie geredelik die antwoord tot die probleem sou vind deur bloot staat te maak op sy intelligensie en die algemene kennis in die bedryf op die tydstip van die ontdekking nie. Daar is aan die hand gedoen dat die doel van die wetgewer nagestreef moet word met die uitleg van die “bestuur of interne besigheidsprosesse” uitsluiting. Die Verklarende Memorandum wat uitgereik is met die bekendstelling van artikel 11D het gemeld dat die wetgewer ten doel gehad het om Suid Afrika op ‘n gelyke speelveld met die res van die wêreld te plaas wat betref N&O. Die N&O belastingbepalings van Australië, die Verenigde Koninkryk (VK) en Kanada is dus bestudeer om die internasionale standaard in die opsig vas te stel. Die SAID is van mening dat die strekwydte van die uitsluiting so omvangryk is dat dit alle rekenaar programmatuur wat ontwikkel is vir ‘n bestuur- of interne besigheidsproses toepassing tref, ten spyte daarvan dat die bedoeling van die belastingpligtige was om die programmatuur te verkoop of te lisensieër aan ‘n onverbonde derde party. Dit was egter bevind dat so ‘n beperkende uitleg die aansporing van rekenaar programmatuur ontwikkeling in Suid Afrika geweldig benadeel in vergelyking met die regime wat geld in lande soos Australië, die VK en Kanada. Ten einde gevolg te gee aan die bedoeling van die wetgewer, is daar aan die hand gedoen dat die uitsluiting slegs so ver moet strek as om rekenaar programme vir eie gebruik te diskwalifiseer. Rekenaar programme wat dus ontwikkel word met die doel om dit te verkoop of te lisensieër aan onverbonde derde partye moet steeds vir die aansporingsinsentief kwalifiseer.