Includes bibliographical references / Eisenberg de Saude inter alia assists and represents foreigners, corporates, non-resident companies and returning South Africans in their South African immigration affairs. Questions relating tax liability for the in respect of the aforementioned often arise during consultations/meetings/briefings. For this reason, I have decided to dedicate my research proposal to the aforementioned with the hope that it will equip me with sufficient knowledge to properly address and assist the foreign clients of Eisenberg de Saude in their tax uncertainties without getting a worrying feeling in the pit of my stomach. In addition to the above, I hope that my research proposal could and would be used as a guide by all relevant and interested persons in alleviating the uncertainties surrounding their tax liabilities and perhaps managing their affairs in a tax efficient manner and I hope that the material mentioned below effectively and clearly imparts what I have learned during preparing and drafting this proposal.

Empirical studies on web-based reporting have usually been examined from a company’s perspective. However, this study provides some evidence on web-based reporting from users’ perspective. The study relied on the Technology Acceptance Model (TAM) and the Innovation Diffusion Theory (IDT) to examine the attitudes of users towards the use of online accounting information and investigate the dominant factors that influence such attitudes. A survey method of research was adopted and a set of questionnaires were designed and administered to different stakeholder groups on the Ghana Stock Exchange (GSE). Out of 435 questionnaires administered, 175 were returned of which 171 were used in the study. The data was analyzed using the Structural Equation Modeling technique (the partial least squares approach). Results of the study suggest that stakeholders generally have a positive attitude towards web-based reporting. Thus, the majority of the respondents consider web-based reporting to be a useful medium for the dissemination of accounting information. The study also demonstrates that attitude is an important determinant of stakeholders’ use of the web-based report. Moreover, stakeholders’ perceptions of the usefulness, ease of use, social network pressures and compatibility of the web-based reporting have a positive influence on attitude towards web-based report. This study makes some important contributions to the financial reporting literature. The study develops a framework that provides insight into users’ attitudes towards web-based reporting, the determinants of such attitudes and their influence on the use of web-based reports. The findings of this study also provide some insightful implications for stakeholders in the corporate web reporting environment by demonstrating amongst others that businesses providing online accounting information should place more emphasis on the quality of the information provided, by ensuring that it is timely, reliable and transparent.

Value-Added Tax (VAT) was introduced in South Africa (“SA”) on 29th September 1991 to replace GST (General Sales Tax) as an indirect system of taxation. It is levied in terms of the Value-Added Tax Act 89 of 1991. The Commissioner of the South African Revenue Service (SARS) is a mandated collector of all tax that is legally payable. SARS has a duty to ensure that the collection of tax is efficient and effective. VAT is a transaction and consumption-based tax that is triggered upon the consumption of goods and services in South Africa. South Africa operates a destination-based VAT system, which means that exports are zero-rated, and imports are subject to VAT at the standard rate of 15 per cent. The upshot of the destination-based VAT system is that it is designed to tax the consumption (in economic parlance) that takes place in South Africa (SA). For the purposes of VAT, revenue loss as a result of cross border supply of goods is insignificant in comparison to revenue loss experienced in the cross-border supply of services supplied via electronic means. This is due to the tangible nature of goods which would be required to be channelled through the border and/or customs, which are generally strictly controlled areas. Such goods could be subject to domestic tax (including VAT), thereby limiting the trade distortions as the foreign supplier will be put in the same tax position as the local supplier. However, all of this will be dependent on domestic legislation and value thresholds in a particular jurisdiction. In the instance of cross border supplies of services supplied electronically, there is increased exposure or risks to trade distortions since these are provided via the internet or through other forms of electronic agents or communication methods. These supplies do not have to physically pass through the border or customs, thereby limiting the control and monitoring of tax authorities. Imported services/reverse charge mechanism is where services supplied by non-residents are taxed within a taxing jurisdiction. This means that a resident of South Africa must account for VAT on services acquired from a non-resident or a person who carries on a business outside of South Africa, to the extent that such services are not used in the furtherance of taxable supplies. Essentially, the responsibility for the collection of tax does not lie with the non- resident but the person who imported the goods or services into South Africa. This is known as the reverse charged mechanism and is applied with respect to imported services acquired from non-resident businesses, consumed in South Africa and not for the furtherance of taxable supplies. In order to level the playground between foreign and local suppliers, the legislature introduced new rules governing the supply of electronic services by a foreign supplier to South Africa. This was done to eradicate the incorrect interpretation & application of the provisions governing imported services. In the 2018 National Budget Speech, released on 21 February 2018, the Minister of Finance announced that the regulation defining “electronic services” for VAT purposes would be updated. This resulted in an amended draft regulation being published on the same date. On 24 October 2018, the Minister of Finance presented the Medium-Term Budget Policy Statement which was accompanied by the Amendment of Revenue Laws Bill 37 of 2018 (“the Bill). Amongst those amendments contained in the Bill was the changes in the VAT treatment of the supply of electronic services (“e-services”) in South Africa. These amendments and the revised e-services regulations are due to take effect on 1 April 2019. The objective of this paper is to discuss to what extent the SA regulations are in line with regulations introduced in the Ottawa Taxation Framework. This paper will also discuss the Amendment of Revenue Laws Bill 37 of 2018 considering electronic services. Lastly, the EU, New Zealand and Australia’s frameworks will be looked at to establish if they have also amended their local VAT/GST legislation considering the Ottawa Taxation Framework. New Zealand, Australia and EU were chosen as target jurisdictions of comparison because they are more developed than South Africa. Furthermore, South Africa has economic relations with Australia and some countries which form part of the European Union. It is also understood that Australia’s GST and South Africa’s VAT are similar in terms of certain aspects. Collectively, South Africa’s VAT and Australia’s GST were both based on the New Zealand’s GST model. This paper finds that the recent amendments by the National Treasury are broad and do not conform to the Ottawa Taxation Framework. The paper also finds that the regulations looks fine on paper, but the implementation thereof will be challenging to both SARS and the VAT vendors. The paper suggests that the National Treasury should look at what countries i.e. New Zealand have done to address the challenge of taxing 'electronic services’ to ensure that the SA VAT legislation is amended in accordance with the suggested guidelines.

To achieve a degree of standardisation of the contents of treaties by their members, Model tax conventions were published by international organisations. Consequently, in 1963, the Organisation for Economic Co-operation and Development (“OECD”) Model was prepared by developed countries of the world and it thus embodies rules and proposals by capital-exporting countries. As it was drafted by representatives of major Western industrialised countries, lower-income, developing countries were concerned that it resulted in too large a reduction in source country tax. The developing countries responded to the success of the OECD Model by developing their own Model convention under the auspices of the United Nations (“UN”) in 1980. This Model was drafted between developed and developing countries and attempts to reflect the interests of developing countries. Although it is based upon the OECD Model, the United Nations Model Double Taxation Convention between Developed and Developing Countries retains much greater source country taxation. Several tax treaties have been promulgated over time in South Africa due to the surge in international trade and investment flows which have tax consequences. There is however, no external enforcement of the above Models in the Republic of South Africa (“RSA”) and as a direct result, deviations from these standard models occur. Both a qualitative and expository study was performed. Thereafter, this dissertation considers South Africa’s treaty practice by outlining the significant deviations between South African double tax treaties and the respective OECD and UN Models. This study examines treaties concluded between South Africa and countries situated in North Africa, East Europe and West Asia. This dissertation concludes that bilateral treaties negotiated and concluded with South Africa consistently deviate from both the OECD and UN Models. These deviations were further examined to establish whether an indicative pattern informs a particular treaty practice. A small number of these observed deviations concur with the RSA position taken on the OECD Model. Treasury needs to circulate a clear and distinct South African Tax Model since South Africa’s international trade and investment flows expand across borders. The concern that South Africa does not have a published Tax Treaty Model is likely to intensify as related parties draw on frequently changing tax Models by the OECD and UN committees which may indirectly affect a developing country’s negotiating power.

Currently, companies are taxed on an individual basis in South Africa and there is no provision for the offsetting of profits and losses of different companies within a tax group. Admittedly, businesses have the option to operate under a single divisionalised entity whereby they are able to enjoy offsetting profit and losses of trades of different divisions within such an entity. There are however, strong business reasons as to why businesses split themselves into separate legal entities. The most noteworthy benefit being the ability to manage business risk through limited liability provisions contained in corporate legislation. Arguments have been put forward to the effect that groups, although legally separated through different corporate entities, operate in much the same way as a divisionalised single entity business does. The current tax treatment, which taxes entities of a group on their individual taxable incomes, is therefore argued to not provide a true assessment of the group’s tax position. Arguments in the Margo Commission of Inquiry report have even gone as far as saying that it seems unfair to tax profitable entities in a group while the overall taxable income of the group may be negative. With the above in mind, the question of whether a group tax system would be suitable for implementation in South Africa is brought to the table. As will be seen in this dissertation, there are strong opinions on either side of determining whether a group tax system would be appropriate for South Africa. Opinions in favour of a group tax system view the system as a potential tool to encourage business through more favourable tax conditions thereby encouraging growth and development of the economy. Drawbacks of the system include the perceived loss to the fiscus as tax relief is provided while concerns have also been raised relating to the current ability of the South African Revenue Service (SARS) to cope with the implementation of such a change to legislation. The author of this dissertation acknowledges the need for South Africa to maximise its revenue collection to meet its budgetary obligations. However, at the same time, the author is of the view that government should look to creating environments in which smaller businesses may develop and grow, potentially increasing revenue collection in the long run in any event. For these reasons, the author has taken a conservative approach to explore the idea of providing for a group tax system for tightly‐ held tax groups with a limited turnover. This could potentially have the effect of developing small businesses while limiting the exposure of the fiscus to a revenue collection reduction. Loosely defined, tightly‐held groups of companies refer to groups where there is a close relation between shareholders of the group. Further to this, the author highlights the challenges that small businesses face in moving towards a group structure to derive the benefits that have been identified in this dissertation. With that in mind, the author has looked to encouraging group formation in small businesses by attempting to relieve some of the challenges that small businesses encounter in trying to establish a group structure. Through this dissertation, the author proposes a group tax system whereby only tightly‐held qualifying groups will be allowed to participate. The proposal contained within the dissertation has been drafted after assessing the findings of the preceding chapters as well as adapting some of the implementation provisions provided by the United Kingdom (UK) and the United States of America (USA) tax legislation. This ability to produce a suitable proposal for implementation in South Africa will be a step towards concluding on whether South African tax legislators should be looking to implement a group tax system whereby tightly‐held groups of companies will be the initial qualifying audience. The conclusion drawn through the research conducted is that steps should be taken towards the implementation of group tax for tightly‐held groups of companies. A stumbling block, however, as identified in the interim Nugent Commission report, is the current state that SARS finds itself in. It would seem reckless to recommend the instatement of a provision of this stature while SARS is in its current state. It is thus concluded, that movement towards a group tax system for tightly‐held groups of companies should be delayed until such time that SARS has re‐established itself as a proficient organ of the state.

This dissertation investigates the factors which influence unlisted companies’ compliance with International Financial Reporting Standards (IFRS) in South Africa at three levels: the global level, the country level, and the company level. This dissertation also considers whether taking such factors into account in the standard-setting process would lead to improved IFRS compliance. This dissertation applies a multiple case study method followed by a national wide survey. Thus, the data were collected by reading the IFRS, and through questionnaires and interviews. A total of 41 companies responded to the survey while five (5) companies participated in the case study. This dissertation’s main findings show that at company level, governance and financial people working for these companies are significant factors which influence their IFRS compliance. Further, non-auditing and/or non-accounting companies are highly reliant on their external auditors in order to comply with the IFRS. The findings also show that at country level, economic, legal, cultural and professional factors influence these companies’ IFRS compliance. At global level, the findings show that the international recognition of IFRS, transparency, comparability, understandability, foreign operations, and importing and exporting are the factors which influence these companies’ IFRS compliance. There are several contributions that can be attributed to this dissertation. First, this dissertation contributes to the literature by extending the research regarding factors (or some indicators for factors) which influence unlisted companies’ IFRS compliance and these companies’ experience of using IFRS in South Africa. Further, this dissertation suggests a model which explains those indicators which appear to influence unlisted companies’ IFRS use at company level. Second, this dissertation contributes to the literature by testing five theories (these are, decision usefulness theory, agency theory, stewardship theory, stakeholder theory and institutional theory) on unlisted companies. Third, this dissertation’s original contribution is to use a self-prophecy effect to gain a better understanding of unlisted companies’ predicted continuing use of IFRS.

Pienaar Brothers (Pty) Ltd was an amalgamated company who sought to introduce a BEE element of ownership into its company in a tax efficient manner. Upon consulting their legal experts they were advised that the best manner in which they could achieve this objective was to enter into an amalgamation agreement in terms of section 44 of the ITA. At this particular time, the law was structured in a way in which it was possible to achieve this objective in a tax efficient matter, particularly because any distribution made by parties to the amalgamation transaction would be tax free. The problem however was that the tax collecting agency never intended the section 44 of the ITA amalgamation process to be STC free, and instead intended a temporary deferral thereof. To address this, the taxing authorities accordingly started putting mechanisms in place to limit the loss of such STC. On the 10 January 2007, SARS issued a public announcement stating that they planned to investigate certain corporate entities which had elaborate corporate structures that led to an impermissible loss of tax. On the 21 February 2007, the Minister of Finance stated that section 44 of the ITA, as it stood, allowed for a loss of STC as opposed to a deferral thereof, and that the taxing authorities intended on withdrawing such STC exemption in order to align it with their initial intention, and to further make such amendment retrospective to the date of such announcement. This was then once again cemented in the form of a press release on the part of SARS on that same day. Thereafter, this proposed amendment was submitted to Parliament in the Draft Taxation Laws Amendment Bill on 27 February 2007, and in May 2007, the Taxpayer completed its amalgamation transaction and achieved its BEE objective into its ownership. On the 7th June 2007 the Taxation Laws Amendment Bill was published together with an Explanatory memorandum which however no longer proposed the withdrawal of the STC exemption contained in section 44 of the ITA, but instead introduced a new addition into section 44 of the ITA. This provision now targeted a resultant company’s equity share capital and share premium, instead of the distribution of company income at the amalgamated company’s level. This new insertion was then promulgated into law on 8 August 2007 as section 44(9A) of the ITA. In complete difference to the initial proposal contained in the forewarning, the practical consequence of section 44(9A) of the ITA was that the income which rolled over from the amalgamated company to the Taxpayer (the resultant company) had in the process changed its nature from revenue to capital which was caught up in the share premium account of the Taxpayer. Section 44(9A) of the ITA accordingly targeted any distribution made by the resultant company of this share premium. The Taxpayer’s problem in the present matter arose in 2011 when SARS sought to tax the Taxpayer on its May 2007 completed transaction, particularly its distribution of its share premium at the time. In addition to this assessment, SARS furthermore also levied interest on such outstanding STC payment from 8 August 2007, the date on which the final enactment was promulgated into law. This was that which accordingly prompted the Taxpayer to bring its matter before the High Court. Here, the prime relief sought by the Taxpayer was an order of constitutional invalidity, while the second order, couched as an alternative to the first was an interpretational argument which had the effect that section 44(9A) of the ITA did not apply to Taxpayer’s distribution when it was made because it was a completed transaction. The gist of the Taxpayer’s constitutional issue requested of the court to declare that the provision did not pass constitutional muster to the extent of its retrospectivity. The court however dismissed the Taxpayer’s claims and held in favour of SARS. The paper seeks to analyse this case alongside the values of legal certainty, as espoused in the Rule of Law, and to consider the probability of success on the part of the Taxpayer if they opted to take the matter on appeal.

Includes bibliographical references. / This research paper will explore the taxation of the income and expenditure in today’s day and age. We will have an in - depth look into the mechanics of trusts, to ascertain whether they still have a role to fulfil in estate planning. Therefore the paper will first explore the background in trusts in Section A, Section B will deal with how trusts are tax and Section C will try and answer why trusts are still popular amidst the unfavourable changes in recent legislation.

Purpose: This study examines 26 large and established South African multi-asset unit trusts in order to determine their style and asset class exposure over time. The objective is to ascertain whether South African multi-asset fund managers can realise outperformance, that exceeds what can be realised through exposure to representative, investable, style and asset class indices. Such an analysis assists in identifying unit trust manager skill, but a further consideration is how to combine unit trusts in a suitable manner, to this end portfolio construction tools are utilised to meet illustrative client objectives in a multi-asset context. Methodology: This study uses monthly total return time series for several investable style and asset class indices as well as South African multi-asset unit trust monthly total return time series. Where historical data permits, the period under investigation is from 1 January 2003 to 30 June 2018. Style and asset class exposure is determined using the Returns Based Style Analysis (RBSA) of Sharpe (1992) applying a 24-month rolling window approach. Findings: The equity style exposures estimated using RBSA provide evidence that on average the value style was dominant across the multi-asset high equity unit trusts examined. For the multi-asset low equity unit trusts examined the low volatility style was dominant. Moreover, a large proportion of the variability in returns of many multi asset unit trusts, can be explained by exposure to style and asset class indices. Consequently only 3 out of the 15 multi-asset high equity unit trusts analysed, could realise performance in excess of their custom style and asset class benchmark. As only a limited number of these unit trusts could demonstrate superior security selection ability the implication is that many asset managers stand to be disrupted by lower cost products that provide similar style and asset class index exposure. Originality/Value: Much research has been conducted into the style exposures of SA general equity funds. However, to the author’s own knowledge this is the first study to apply RBSA in a performance context to multi-asset unit trusts, under the new ASISA classification standards. The benefits of portfolio construction tools such as portfolio simulation and the ‘Risk Budgeting’ approach are also discussed and applied in a multi-asset context.

Includes bibliographical references. / The aims of this paper, are twofold: first, to provide an overview of the South African tax law principles governing the deductibility of interest expenditure incurred by taxpayers in respect of LBO transactions, as altered by the recent changes to the Act, and secondly, to critically consider and comment on the nature and perceived effect of such amendments.