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 (specialising in Taxation) / Trusts are not as desirable as they once were, and every year they seem to become less so. The reason for their increasing undesirability is the heavy tax burden they carry. / NG (2020)

A Research Report Submitted to the Faculty of Commerce, Law and Management in Partial Fulfilment of the Requirements for the Degree of Master of Commerce (Specialising in Taxation) / In the 2016 Budget Speech, the then Minister of Finance, Pravin Gordhan, announced a decision to introduce a Health Promotion Levy (‘sugar tax’) on sugar-sweetened beverages (‘SSBs’). Sugar tax came into effect on 1 April 2018 in South Africa. In its Policy Paper released by the National Treasury in July 2016, titled “Taxation of Sugar Sweetened Beverages” (‘Policy Paper’), the National Treasury outlined the proposed sugar tax. It argued that the primary objective of the introduction of sugar tax was to reduce excessive sugar intake and curb the growing problem of obesity. Obesity and other non-communicable diseases (‘NCDs’) have significantly escalated over the past 30 years and has become a growing concern in South Africa. This has resulted in South Africa being ranked the most obese country in sub-Saharan Africa. The impact of SSBs on obesity and other NCDs has received widespread attention on the international stage and by the World Health Organisation (‘WHO’). This is evident from the fact that South Africa is not the first country in recent years to introduce a form of sugar tax which has been gaining traction as popular intervention to combat the growing concern of NCDs. The argument arises as to whether the tax is actually intended to meet its desired health benefits or simply increase revenue for the fiscus. This research will examine whether the implementation of sugar tax will contribute to its intended health objectives envisaged. In order to achieve this, a study will need to be undertaken with countries which have successfully introduced sugar tax including, Mexico, Norway, Denmark, the United Arab Emirates, Chile and United Kingdom. Lastly, this study will also explore the success of the implementation of sugar tax and the impact it has had on the fiscus of these countries. / NG (2020)

Thesis (MComm)--University of Stellenbosch, 2011. / ENGLISH ABSTRACT: It is becoming increasingly common for lessees to receive contributions from lessors towards leasehold improvements costs. A lessee will be entitled to claim an allowance in terms of section 11(g), where expenditure has actually been incurred in pursuance of an obligation in terms of a lease agreement, and the property is used for the production of income. Obstacles arise where the lessee either receives a payment or benefit, in cash or otherwise from the lessor, either as consideration for the lessee to effect the improvements or as inducement for the lessee to enter into the lease agreement. The nature of these payments or benefits received by the lessee for income tax purposes needs to be assessed with reference to the general principles laid down by the South African courts in respect of the “gross income” definition and international case law dealing with the income tax treatment of similar payments made by the lessor to the lessee. Factors also need to be identified, which should be taken into account to assess the income tax nature of these payments or benefits. The terms of the agreement in terms of which such payments or benefits are made should clearly state the purpose thereof, and a conclusive answer will depend on the particular circumstances and facts of each case. The interaction between a payment or benefit received by a lessee and the availability of a leasehold improvements allowance in terms of section 11(g) is a complex matter and it remains to be seen how South African courts will deal with these issues. / AFRIKAANSE OPSOMMING: Dit raak toenemend algemeen dat huurders ʼn bydrae tot huur verbetering koste vanaf verhuurders ontvang. ʼn Huurder sal geregtig wees om ʼn artikel 11(g) toelaag te eis, waar onkostes werklik aangegaan is ter voldoening aan ʼn verpligting ingevolge die huurooreenkoms en die eiendom word gebruik vir die voortbrenging van inkomste. Struikelblokke ontstaan waar die huurder ʼn bedrag of voordeel, in kontant of andersins ontvang vanaf die verhuurder, as vergoeding vir die aanbring van verbeteringe of as beweegrede om die huurooreenkoms te sluit. Die inkomstebelastingaard van hierdie bedrae of voordele ontvang moet beoordeel word met verwysing na die algemene beginsels ontwikkel deur die Suid-Afrikaanse howe met betrekking tot die “bruto inkomste” definisie en internasionale hofsake wat handel met die inkomstebelastinghantering van soortgelyke betalings vanaf die verhuurder aan die huurder. Faktore moet ook identifiseer word wat inag geneem moet word ten einde die aard van hierdie bedrae of voordele vas te stel. Die terme van die ooreenkoms ingevolge waarvan die bedrag of voordeel ontvang word, moet duidelik die doel daarvan uiteensit. ʼn Beslissende antwoord sal afhang van die spesifieke omstandighede en feite van elke geval. Die interaksie tussen ʼn betaling of voordeel ontvang deur die huurder en die beskikbaarheid van ʼn huurverbeteringe toelaag ingevolge artikel 11(g) is ʼn komplekse onderwerp en daar sal nog gesien moet word hoe die Suid-Afrikaanse howe hierdie kwessies sal hanteer.

Thesis (MAcc) -- Stellenbosch University, 2003. / ENGLISH ABSTRACT: The introduction of section 9E in the Income Tax Act, No.58 of 1962 (hereafter “the Act”) became effective on 23 February 2000. The main reasons for the introduction of this was, inter alia, to broaden the tax base and to phase in the residency basis of taxation. Consequently are the foreign dividend rules of section 9E interrelated to the foreign income rules of section 9D, being the application of the residence basis of taxation. The main objective of this study is to investigate the taxation of foreign dividends in the Republic of South Africa. The introduction of section 9E saw new terminology introduced, which need analysis. This analysis is made possible by supplying the definitions from the Act, as well as making use of national and international case law. Further investigation is also done as to the relevance of section 9E to other sections in the Act, relevant anti-avoidance rules regarding foreign dividends, the effect of section 9E on investment income from tax havens, with specific reference to natural persons, the effect of taxation of foreign dividends on the migration- and investment decisions of non-residents, relief provided regarding double taxation and section 9E’s effect on secondary taxation on companies. Lastly, the collection of taxation on foreign dividends is investigated. / AFRIKAANSE OPSOMMING: Die invoeging van artikel 9E in die Inkomstebelastingwet, No.58 van 1962 (hierna “die Wet”) het van krag geword op 23 Februarie 2000. Die hoofredes vir die invoeging van die artikel in die Wet was onder andere om die belastingbasis te verbreed en om die verblyfbasis van belasting in te faseer. Juis as gevolg van laasgenoemde, word reëls rakende buitelandse dividende in artikel 9E gekombineer met die buitelandse inkomste-reëls van artikel 9D. Die hoofdoel van hierdie studie is om belasting op buitelandse dividende in die Republiek van Suid Afrika te ondersoek. Met die invoeging van artikel 9E het daar ‘n aantal nuwe terme te voorskyn gekom, wat hul ontleding noodsaak. Hierdie ontleding word moontlik gemaak deur bloot die definisies uit die Wet self weer te gee, asook deur die gebruik van nasionale en internasionale regspraak . Verdere ondersoek word ook gedoen na die toepaslikheid van artikel 9E op ander artikels in die Wet, relevante teenvermydingsbepalings met betrekking tot buitelandse dividende, die invloed van artikel 9E op beleggingsinkomste uit belastinghawens, met spesifieke verwysing na belegging deur natuurlike persone, die invloed van belasting op buitelandse dividende op die migrasie-en beleggingsbesluite van nie-inwoners, verligting wat beskikbaar is ten opsigte van dubbelbelasting en die verband wat artikel 9E hou met sekondêre belasting op maatskappye. Laastens word die invordering van belasting op buitelandse dividende ondersoek.

Thesis (MAcc)--Stellenbosch University, 2012. / ENGLISH ABSTRACT: Leases are common phenomena in the South African and international business arena. Leasing is a popular and often cheaper method to obtain the use of property without the property being acquired. Included in property is immovable, movable, tangible and intangible property. The premature termination of lease agreements are also a common phenomenon in the South African and international business arena. When a lease is terminated prematurely, it is currently the practice that the person who terminates the lease agreement has to pay a termination penalty to the other party of the lease agreement. A lease agreement can however be terminated by either the lessee or the lessor. When both the paying and receiving parties assess their income tax liabilities, they may be confronted with the issue of how the payment or receipt of the termination penalty should be treated for income tax purposes. In practice there currently exists uncertainty whether the penalty should be treated as revenue- or capital in nature. The nature of this penalty depends on the background facts and must be judged individually on the basis of the guidelines approved by the courts laid down with respect to the issue of income versus capital. For this issue to be satisfactorily answered, the income tax treatments of lease termination penalties in Australia, Canada and the United States of America are investigated. The purpose of this study is to find guidelines, tools and principles to be used in a South African context, which may lead to the efficient and careful handling of lease termination penalties for South African tax purposes. The treatment of a lease termination penalty under current South African tax legislation is also studied. / AFRIKAANSE OPSOMMING: Huurooreenkomste is alledaagse verskynsels in die Suid-Afrikaanse en internasionale sakesektor. Dit is gewilder en dikwels goedkoper vir besighede om eiendom te huur, eerder as om dit te koop, om sodoende die gebruik van die eiendom te bekom. Ingesluit by eiendom wat gehuur word is onroerende-, roerende-, tasbare- en ontasbare eiendom. Die voortydige beëindiging van huurooreenkomste is ook „n alledaagse verskynsel in die Suid-Afrikaanse en internasionale sakesektor. Waar ‟n huurooreenkoms voortydig beëindig word, is dit tans die praktyk dat die persoon wat die huurooreenkoms beëindig „n beëindigingsboete moet betaal aan die ander party in die huurooreenkoms. Die huurooreenkoms kan egter deur óf die huurder óf die verhuurder beëindig word. Wanneer beide die betalende party en die ontvangende party se inkomste-belastingaanspreeklikhede bereken word, kan hulle gekonfronteer word met die vraag oor hoe om die betaling of ontvangste van die beëindigingsboete vir inkomstebelasting-doeleindes te hanteer. Daar bestaan tans in die praktyk onsekerheid of die betaling of die ontvangste van hierdie beëindigingsboete kapitaal of inkomste van aard is. Die vraag of die betaling of ontvangste inkomste of kapitaal van aard is, hang dikwels af van die agtergrondfeite en moet elkeen individueel beoordeel word aan die hand van die riglyne wat reeds deur die howe neergelê is rondom inkomste teenoor kapitaal. Ten einde die vraagstuk bevredigend te beantwoord, word ondersoek ingestel na die inkomstebelastinghantering van beëindigingsboetes in Australië, Kanada en die Verenigde State van Amerika. Die doel van hierdie ondersoek is om potensiële riglyne, hulpmiddels of beginsels te identifiseer wat binne ‟n Suid-Afrikaanse konteks toegepas kan word en wat kan lei tot die effektiewe en deurdagte hantering van beëindigingsboetes vir Suid-Afrikaanse inkomstebelastingdoeleindes. Verder word die inkomstebelastinghantering van beëindigingsboetes ingevolge huidige bestaande Suid-Afrikaanse inkomstebelasting-wetgewing ondersoek.

Thesis (MAcc)--Stellenbosch University, 2012. / ENGLISH ABSTRACT: Client loyalty programmes are a common phenomenon in the South African market. Despite the fact that client loyalty programmes have been prevalent in South Africa since the 1980‟s, the South African Revenue Service has issued no guidance on the treatment of client loyalty programme transactions in the hands of the consumer. Benefits received in the form of goods, services or discounts from a client loyalty programme are not subject to normal South African income tax based on the current practice in South Africa. The main objective of this study was to determine whether or not the current practice applied in South Africa is correct. In order to obtain a better understanding of the functioning of client loyalty programmes a selection of the most popular client loyalty programmes in South Africa was made and the terms and conditions of these respective client loyalty programmes were analysed. Taking into account the way client loyalty programmes function, the taxability of client loyalty programme transactions were reviewed and analysed with reference to relevant tax law sections and case law. In order to investigate a client loyalty programme transaction as a whole, the tax treatment of the supplier that grants points or miles was included in the scope of the study. The tax treatment of the supplier could potentially shed more light on the tax treatment of the consumer who earn points or miles. The consumer and the supplier have possible income tax (which includes capital gains tax) and VAT implications, consequently both the income tax treatment and the VAT treatment for the consumer and the supplier were considered. In addition, the tax treatment of client loyalty program transactions in South Africa was compared with a country (Australia) whith similar tax laws to South Africa and income tax principles or practices were identified which might be useful within a South African context. It was found that client loyalty programme transactions satisfy the general gross income definition and that the value of the transaction must be included in the consumer's gross income. Only when employees earn points or miles in their own name by virtue of goods or services purchased by their employer, a possible employees‟ tax obligation arises. It was found that within an employee/employer relationship, the requirements of paragraph (c) and paragraph (i) of the "gross income" definition are not met due to the fact that there are no causal connection or direct relationship between the benefit received and the services rendered and also because the client loyalty programme supplier is not an associated institution of the employer. Australian case law confirms the above conclusions in a South African context. The VAT implications of a client loyalty programme transaction occur for the consumer when the consumer exchange points or miles for benefits at a programme partner and not when the points or miles are earned. Capital gains tax implications will only be applicable if a consumer disposes of a capital asset obtained in terms of a client loyalty programme transaction. It was found that the current practice in South Africa of not taxing benefits received from a client loyalty programme is incorrect. To implement the taxability of client loyalty programme transactions in South Africa it is recommended that SARS should formulate guidelines regarding the tax treatment of client loyalty programme transactions. The study includes recommendations to facilitate the implementation of the taxability of client loyalty programme transactions. / AFRIKAANSE OPSOMMING: Kliëntelojaliteitsprogramme is ʼn algemene verskynsel in die Suid-Afrikaanse mark. Ten spyte van die feit dat kliëntelojaliteitsprogramme reeds sedert die 1980's in Suid-Afrika voorkom, het die Suid-Afrikaanse Inkomstediens nog geen leiding oor die hantering van ʼn kliëntelojaliteitsprogramtransaksie in die hande van die verbruiker uitgereik nie. Die huidige praktyk in Suid-Afrika is dat voordele wat in die vorm van goedere, dienste of afslag vanaf ʼn kliëntelojaliteitsprogram ontvang word nie aan normale Suid-Afrikaanse inkomstebelasting onderhewig is nie. Die hoofdoelwit van die studie was om te bepaal of hierdie huidige praktyk wat in Suid-Afrika toegepas word korrek is, al dan nie. Ten einde ʼn beter begrip van die werking van kliëntelojaliteitsprogramme te verkry is ʼn seleksie van die gewildste kliëntelojaliteitsprogramme in Suid-Afrika gemaak en hierdie onderskeie kliëntelojaliteitsprogramme se bepalings en voorwaardes is ontleed. Met in agneming van die werking van kliëntelojaliteitsprogramme is die belasbaarheid van kliëntelojaliteitsprogramtransaksies ontleed en geanaliseer deur na relevante belastingwetsartikels asook regspraak te verwys. Ten einde die kliëntelojaliteitsprogramtransaksie in sy geheel te beskou is die belastinghantering van die verskaffer wat punte of myle toeken by die omvang van die studie ingesluit om moontlik meer lig te werp op die belastinghantering van die verbruiker wat punte of myle verdien. Die verbruiker en die verskaffer het moontlike inkomstebelasting- (wat kapitaalwinsbelastingimplikasies insluit) en belasting op toegevoede waarde implikasies, gevolglik is beide die inkomstebelasting- sowel as die BTW-hantering deur die verbruiker en die verskaffer oorweeg. Die belastinghantering van kliëntelojaliteitsprogramtransaksies in Suid-Afrika is verder vergelyk met ʼn land (Australië) wat soortgelyke inkomstebelastingwetgewing as Suid-Afrika het en inkomstebelasting beginsels of praktyke is geïdentifiseer wat binne ʼn Suid-Afrikaanse konteks van nut kan wees. Dit het aan die lig gekom dat ʼn kliëntelojaliteitsprogramtransaksie aan die algemene bruto inkomste definisie voldoen en dat die waarde van die transaksie by die verbruiker se bruto inkomste ingesluit moet word. Slegs wanneer werknemers punte of myle in hulle eie naam verdien op grond van goedere of dienste wat deur hul werkgewers aangekoop is, ontstaan ʼn moontlike werknemersbelastingverpligting. Daar is bevind dat wanneer ʼn werknemer/werkgewer verhouding voorkom daar onderskeidelik nie aan die vereistes van paragraaf (c) en paragraaf (i) van die “bruto inkomste” definisie voldoen word nie, aangesien daar nie ʼn kousale verband of direkte verhouding tussen die voordeel ontvang en die dienste gelewer bestaan nie en ook omrede die kliëntelojaliteitsprogram verskaffer nie ʼn verwante inrigting uitmaak nie. Australiese regspraak bevestig die bogenoemde gevolgtrekkings binne ʼn Suid-Afrikaanse konteks. Die BTW-implikasie vir die verbruiker ingevolge ʼn kliëntelojaliteitsprogramtransaksie ontstaan wanneer die verbruiker punte of myle by ʼn programvennoot vir voordele inruil en nie wanneer die punte of myle verdien word nie. Daar sal alleenlik kapitaalwinsbelastingimplikasies wees indien ʼn verbruiker oor ʼn kapitale bate beskik wat ingevolge ʼn kliëntelojaliteitsprogramtransaksie verkry is. Daar is bevind dat die huidige praktyk in Suid-Afrika, naamlik dat voordele wat vanaf ʼn kliëntelojaliteitsprogram ontvang word nie belasbaar is nie, foutief is. Ten einde die belasbaarheid van kliëntelojaliteitsprogramtransaksies in Suid-Afrika te implementeer word daar aanbeveel dat die SAID riglyne moet formuleer rakende die belastinghantering van kliëntelojaliteitsprogramtransaksies. Die studie bevat ook aanbevelings om die implementering van die belasbaarheid van kliëntelojaliteitsprogramtransaksies te vergemaklik.

Thesis (MAcc) --Stellenbosch University, 2014. / ENGLISH ABSTRACT: The study explores the question as to whether income taxpayers are in a more disadvantaged position due to the deletion of section 11(bA) and the replacement thereof with section 11A of the Income Tax Act No.58 of 1962 specifically regarding pre-production raising fees incurred during the expansion of an existing industry. It was found in CSARS v South African Custodial Services (Pty) Ltd that raising fees can be read in under the phrase interest and related finance cost as found in section 11 (bA) and therefore deductible under this provision. Section 11 (bA) was however recently deleted from the South African Income Tax Act and replaced with section 11A. In terms of judicial precedent, stare decisis, it was proved that raising fees will also be deductible in terms of section 24J (section 24J regulates and determines the amount of pre-production raising fees that may be deducted for income tax purposes in terms of section 11A). It was found that pre-production raising fees incurred will be ring-fenced in terms of section 11A until such a time that sufficient taxable income is generated from that specific industry that is being expanded. Section 11 (bA) contains no such ring-fencing restrictions and thus an assessed loss may be created and used against other taxable income of the taxpayer. It was also found that the income tax position of raising fees incurred by the taxpayer is determined by the exact time that the entity starts with the carrying on of a trade in terms of section 11 (bA) and section 11A. To answer the question satisfactorily, four scenarios were examined all with different stages where pre-production raising fees will be deductible in terms of section 11 (bA) and section 11A. The present value of the pre-production raising fees deduction calculated in terms of section 11(bA) and section 11A are compared against each other to ascertain whether or not the income taxpayer is in a more disadvantaged position due to the deletion of section 11(bA) and the replacement thereof with section 11A. It was found that the deletion of section 11 (bA) and the replacement thereof with section 11A is in most cases more detrimental to the taxpayer. / AFRIKAANSE OPSOMMING: Die doel van die studie is om die vraagstuk te ondersoek of belastingpligtiges in ʼn meer nadelige posisie is as gevolg van die skrapping van artikel 11(bA) en vervanging daarvan met artikel 11A van die Inkomstebelastingwet No.58 van 1962 spesifiek in verband met voorproduksie-leningskommissie aangegaan tydens die uitbreiding van ʼn bestaande bedryf. Daar word in CSARS v South African Custodial Services (Pty) Ltd bevind dat leningskommissie ingelees kan word onder die frase rente en verwante finansieringskoste soos gevind in artikel 11(bA) en dus aftrekbaar is in terme van hierdie bepaling. Artikel 11(bA) is egter onlangs uit die Suid-Afrikaanse Inkomstebelastingwetgewing geskrap en met artikel 11A vervang. In terme van regspresedent, stare decisis, is daar bewys dat leningskommissie ook aftrekbaar is in terme van artikel 24J (wat die aftrekkingsbedrag in terme van artikel 11A reguleer en dus ook aftrekbaar in terme van artikel 11A is). Daar is bevind dat voorproduksie-leningskommissie aangegaan omhein sal word in terme van artikel 11A tot en met die tydstip dat daar genoegsame belasbare inkomste is uit die spesifieke bedryf wat uitgebrei word waarteen hierdie uitgawes afgespeel kan word. Artikel 11(bA) bevat egter geen omheiningsbeperking nie en dus kan ʼn aangeslane verlies geskep en aangewend word teen die belasbare inkomste van die bedrywe wat deur die belastingpligtige verdien word. Daar is verder ook bevind dat die inkomstebelastingposisie van die leningskommissie deur die belastingpligtige aangegaan, bepaal word deur die tydstip waarop die bedryf in aanvang geneem word in terme van artikel 11(bA) en artikel 11A. Ten einde die vraagstuk bevredigend te beantwoord, word vier scenario’s ondersoek wat die aftrekking van voorproduksie-leningskommissie vir inkomstebelastingdoeleindes op verskillende tye ondersoek en vergelyk in terme van artikel 11(bA) en artikel 11A. Die huidige waarde van die voorproduksie-leningskommissie-aftrekking in terme van bogenoemde artikels word met mekaar vergelyk om tot ʼn slotsom te kom rakende of die belastingpligtige in ʼn meer nadelige posisie is as gevolg van die skrapping van artikel 11(bA) en vervanging daarvan met artikel 11A. Daar word bevind dat die skrapping van artikel 11(bA) en vervanging daarvan met artikel 11A in meeste gevalle meer nadelig vir die belastingpligtige is.

M.Comm. (Economics) / The Gauteng provincial government is currently exploring possible sources for raising revenue to finance the increasing demand in social services. In the current fiscal stance, the bulk of provincial government revenue is constituted of funds transferred from the national government in the form of equitable share to provinces. Thus, the main purpose of this study is to assess the overall impact of the increase in the motor vehicle license fees and tourism levy, as important sources of the Gauteng provincial government own sources of revenue, on economic activities in the Gauteng Province. The study uses the provincial Computable General Equilibrium (CGE) model to simulate an increase in motor vehicle license fees and tourism levy, and to determine how such increases in taxation will affect provincial socio-economic variables such as the gross domestic product (GDP), employment and household consumption expenditure. The findings of the study are that a 10% increase in motor vehicle license fees or tourism levy negatively affects the Gauteng GDP, employment and household consumption. Nonetheless, the effect on provincial government revenue is positive. Given the negative effect of such an increase in taxation on key socio-economic variables, the study suggests that an increase in taxation on motor vehicle license fees or tourism levy should not be considered as options for raising revenue for the Gauteng Province.

M.Comm. / At some stage in the development of multi-national organisations, the need for a company to raise adequate finance for the group and use the group's retained earnings in the most efficient way may well arise. In order to raise adequate finance tax efficiently, careful consideration should be given to, inter alia, income tax consequences pertinent to different jurisdictions considered as a possible locus for a finance company. Since South Africa's emergence into the modern day commercial village, many foreign investors were either re-introduced or introduced to South Africa as a place of business or potential business. Also, South African businesses started to expand more rapidly across the country's borders. Assuming, as the optimist would, that what has been experienced is only the start of greater things to come, the need for the development of international tax planning techniques and/or the identification of planning opportunities in the context of group finance companies is imperative. Naturally, such techniques can only be developed subsequent to analysing the tax systems of the home jurisdiction of potential major investors (for instance the United States of America) and/or of jurisdictions which traditionally represented planning opportunities from a South African perspective (for instance the Netherlands) and/or of jurisdictions that may become relevant from a planning perspective as a result of South Africa's transition or some other reason such as differences in tax systems opening up the opportunity for tax arbitrage (for instance Mauritius or Ireland, respectively). However, since the first and second of the above categories have been explored amply up until the current point in time there is no need to take them into account in yet another study.

No description available.