Inaug.-diss.--Zürich.

Thesis--Princeton University, 1914. / Without thesis statement. "Bibliography of select references": p. 325-328.

When mergers and acquisitions are conducted, valuation plays an important role in establishing a fair market value (FMV) of a target company. A number of variables including direct taxes are considered during the valuation process. This study looks at the impact of indirect taxes on the valuation result of target companies involved in mergers and acquisitions. Target companies considered for this study were those from different industries that were involved in mergers and acquisition transactions in 2004/2005 period, had at least three years of financial information available and had paid capital gains tax (CGT), an indirect tax, following a successful conclusion of the transaction. Research showed that there is likelihood that valuation result of target companies involved in mergers and acquisitions is significantly different when valuation included CGT compared to when valuation excluded CGT. Furthermore, considerable savings, implying higher ROI, could be realized should corporate acquirers and private equity factored in the effect of indirect taxes on FMV of target companies especially in industries where there are considerable under-valued operating assets. Effective tax rates can be determined for different industry groups and they can be mathematically be modelled with fair accuracy. / Dissertation (MBA)--University of Pretoria, 2010. / Gordon Institute of Business Science (GIBS) / unrestricted

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The right to tax is traditionally based on connection to jurisdiction. Taxation is divided into international and domestic systems. An international tax system subjects its residents to tax on their income from all around the world while a domestic tax system subjects its residents to tax only on income arising out of a source within the borders of such a State. Under the international tax system, a State's right to tax firstly depends on whether the taxpayer deriving the said taxable income is a resident of that country or not. With respect to an entity or enterprise, its place of effective management or its headquarters within a State is used to establish residence of such an entity in the State hence making the entity taxable. Where the enterprise does not have a place of effective management or headquarters in a State, hence rendering such enterprise a non-resident, treaty rules have established that the permanent establishment concept be used to tax business profits. The permanent establishment becomes the minimum criteria for establishing that such an enterprise has an economic presence within the borders of the source State. In the presence of an enterprise having cross-border transactions, it is possible for the enterprise to be subject to taxable under both the domestic tax system of the State within which it is a resident as well as under the international tax system of the source State within which it has a permanent establishment, thus arising the question of double taxation. To help solve such a situation, legal instruments, arising in the form of tax treaties were created to combat double taxation of income arising out of cross-border transactions. Integral in solving this situation is the concept of permanent establishment. The permanent establishment is a source rule; thus a basic requirement to be met before business profits of a non-resident that are attributable to its permanent establishment in the source State are taxed in that State. However, technology developments and the rise of electronic commerce are rising problems on the application of the permanent establishment concept in relation to taxing income from international sources of such businesses.3 The broad meaning of the permanent establishment concept, particularly its requirements, make it difficult and ambiguous during its application to enterprises that conduct their businesses electronically or via the internet.

In the past, there has been confusion regarding the taxation of dividends received from employee share scheme trusts. Conflicting interpretations of the definitions in section 8C and certain provisions of 10(1)(k) of the Income Tax Act No. 58 of 1962 (ITA) have caused administrators of these schemes to treat the taxation of dividends in various ways. Section 10(1)(k)(i)(ii) was introduced in the Taxation Laws Amendment Act (TLAA) of 2013 to address the situation where employers are disguising salaries and bonuses as dividend payments to members of employee share scheme trusts. The intention behind this new section 10(1)(k)(i)(ii) is quite clear but it is not entirely certain whether it is having the desired effect as there is still uncertainty around the treatment of dividends from unrestricted equity instruments. The Davis Tax Committee (DTC) published recommendations on the taxation of trusts in its first interim report on estate duty. These recommendations could further complicate matters and have significant tax implications for all the parties involved in these employee share scheme trusts. To try and understand the uncertainty around these dividend payments an analysis was conducted on section 10(1)(k)(i)(dd) and 10(1)(k)(i)(ii) of the ITA. It was also necessary to look at the different types of employee share schemes that are available and also the nature of dividends, dividends withholding tax (DWT) and capital gains tax (CGT). Section 8C and the definitions therein were also analysed to understand the taxation of taxpayers on vesting of equity instruments. A brief look at the treatment of dividend payments from United Kingdom employee share scheme trusts also provided some useful context from an international perspective. Two case studies were conducted to analyse the overall tax effect based on the current tax legislation and also taking into consideration the recommendations made by the first DTC Report.

This paper examines changes in share price momentum by comparing the share price momentum before and after the ex-dividend date. The study was conducted using price data from shares comprising the Johannesburg Stock Exchange (JSE) Shareholder Weighted Top 40 Index on 30 June 2015. Share price momentum changes were considered over 10 business days, 21 business days and 90 business days before and after the ex-dividend date. The results of the study are as follows: The share price momentum tends to be positive before and after the ex-dividend date. On average, the share price momentum is positive more frequently before the ex-dividend date than afterwards. Comparing before and after ex-dividend date share price momentum, there was no statistically significant difference over 10 and 21 business days. When comparing before and after ex-dividend date share price momentum over 90 business days, a statistically significant difference exists. The reasons for the respective statistically significant and non-significant differences are speculative and are not addressed in this paper. These occurrences could be investigated as further areas of research.

In assessing the problems that arise when the practice of transfer pricing is applied to the transfer of intangible asset transfers there are certain areas and nuances that need to be recognized. These include the distinction between economic and legal ownership and the fact that the two concepts, in certain circumstance, are mutually exclusive. Furthermore, the fact that the traditional methods of transfer pricing may not be able to address the unique nature of certain intangibles and that even the more complex methods involving both parties may fall short in situations where the rights and obligations connected to the intangibles assets are not subject to written agreements or accounting standards and procedures. In delving into the interaction of these two fields I will first establish the playing field and the rules, being the practice of transfer pricing, both on the international stage and domestic level. Next it will be necessary to understand the nature of intangible assets as viewed internationally. Upon reviewing the status of intangible assets in the context of transfer pricing I hope to locate the shortcomings caused by the unique characteristic of intangibles and hopefully will be able to suggest some viable options and alternatives.

The study uses stress testing to determine the need, if any, for additional capital and/or provisioning for commercial banks in Botswana. The aim is to probe the use of supervisory stress testing as a mitigating factor to some concerns that have been raised with the Basel capital adequacy ratio (CAR) following the 2007-9 global financial crisis. During the crisis, some financial institutions failed or required some form of government assistance, amid having met the minimum CAR requirements prior to the crisis. This led to increased public scrutiny and a loss of confidence in financial regulation. As a result, some scholars have argued that the Basel capital framework is not sufficient as a measure of capital adequacy and as such advocate for the adoption of stress testing to overcome the shortcomings. Specific reference is often made to the success of the subsequent SCAP (US) and CEBS (EU) stress tests that are conceived to have helped restore public confidence as they revealed several oversight loopholes in the existing Basel methodology for the determination of adequate capital for financial institutions. In this regard, this paper considers the context of Botswana, where, even though banks withstood the financial crisis with a relatively strong stance, the economy remains concentrated with heavy dependence on the mining sector. This increases macroeconomic vulnerability and banking sector risks and hence intensifies the need to ensure that banks have sufficient capital holdings at all times. The study adopts an accounting-based approach to stress testing by applying shocks for credit, interest rate, foreign exchange and liquidity risks with the CAR as the main metric. A combined scenario stress test revealed that a collective change in provisions, NPLs, interest rate and exchange rate, that resulted in a decline in CAR from 19.4 to 18.6 post-shock. The available capital remains adequate even following assumed stress conditions. However, the stress test has revealed weaknesses in credit risk and foreign exchange risk as some banks’ capital adequacy fell below the 15 percent minimum. Furthermore, the scenario analysis showed the need for a P22 million capital injection into the banking system, should the tested scenarios occur. As far as can be reasonably established, this kind of study has not been published before for Botswana. As such, this paper lays groundwork for future studies particularly relating to the formulation of scenarios that can better reflect the risk profile of the Botswana banking system.