Thesis (MAccounting)--Stellenbosch University, 2013. / ENGLISH ABSTRACT: The term beneficial owner is most commonly found in the dividend, interest and the royalty
articles of tax treaties (Baker, 2007:15), yet there is still uncertainty surrounding the actual
meaning of the term (Du Toit, 2010: 500).
Since Dividends Tax became effective in South Africa as from 1 April 2012, it has become
necessary to clarify what the term beneficial owner means to correctly apply section 64E of
the Income Tax Act No 58 of 1962 (‘Act’).
Section 64EA(a) of the Act determines that the Dividends Tax liability falls on the
“beneficial owner of a dividend” [Emphasis added]. Section 64D of the Act does define the
beneficial owner as “the person entitled to the benefit of the dividend attaching to the
share”, the application of this definition to a discretionary trust may be challenging since
legal ownership must be distinguished from economic ownership (PWC Synopsis, 2012:6).
In the absence of guidance by the South African Revenue Service (‘SARS’), the first
problem arises as to the interpretation of this term within the context of dividend income
received by a discretionary trust (Louw, 2012:1). This leads to a second problem relating
to the correct application of section 64G(3)(a)(i) of the Act, which makes provision for a
reduced rate of dividends tax.
The purpose of this study is to set parameters for determining who the beneficial owner of
dividend income within the context of a discretionary trust is, where the dividend is paid in
respect of shares held in a resident company, and to the extent that the dividend does not consist of a distribution of an asset in specie. The instances when the reduced rate is
applicable in terms of section 64G(3) of the Act will also be clarified.
In order to achieve these objectives, an analysis of factors that should be taken into
account to define and determine beneficial ownership, was undertaken. Common- and civil
law definitions were investigated. The Organisation for Economic Co-operation and
Development’s (‘OECD’) Model Tax Conventions (MTCs’) and its Commentaries provided
possible factors to assist in identifying the beneficial owner. In the absence of a decision
by a South African court, the judgements in the five international court cases were
consulted. Four steps were formulated to reach a conclusion.
In terms of the these steps, the trust beneficiary remains the beneficial owner of dividend
income received by a trust in the case of the income having been distributed by the
trustees in having exercised their discretion in terms of the trust deed. In the case of
contingent beneficiaries it is suggested that the trust, with the trustees, acting in their
official capacity on behalf of the trust, would be seen as the beneficial owner of the
dividend income.
In terms of section 64G(3) of the Act, where a foreign trustee or a foreign trust beneficiary
has been identified as the beneficial owner(s) of a dividend, the rate at which Dividends
Tax is withheld could be reduced as a result of the application of a double tax agreement. / AFRIKAANSE OPSOMMING: Die begrip uiteindelik geregtigde kom mees algemeen voor in die dividende, rente en die
tantième artikels van dubbel belasting ooreenkomste (Baker, 2007:15), tog is daar steeds
onsekerheid oor die werklike betekenis van hierdie begrip (Du Toit, 2010: 500).
Nadat Dividendbelasting op 1 April 2012 in Suid-Afrika in werking getree het, het dit
noodsaaklik geword om die betekenis van die begrip uiteindelik geregtigde vas te stel ten
einde artikel 64E van die Inkomstebelastingwet Nr. 58 van 1962 (‘die Wet’) korrek toe te
pas.
Artikel 64EA(a) van die Wet bepaal dat die aanspreeklikheid vir Dividendbelasting op die
“uiteindelik geregtigde van ‘n dividend namate die dividend nie ‘n uitkering van ‘n bate in
specie uitmaak nie” [klem bygevoeg] val. Artikel 64D van die Wet as "die persoon geregtig
op die voordeel van die dividend verbonde aan ‘n aandeel", nogtans kan die toepassing
hiervan in 'n diskresionêre trust uitdagend wees, aangesien wettige eienaarskap onderskei
moet word van ekonomiese eienaarskap (PWC Synopsis, 2012:6). In die afwesigheid van
leiding deur die Suid-Afrikaanse Inkomstediens ('die SAID'), ontstaan die eerste probleem
weens die interpretasie van die begrip binne die konteks van dividend inkomste ontvang
deur 'n diskresionêre trust (Louw, 2012:1). Dit lei tot 'n tweede probleem wat verband hou
met die korrekte toepassing van artikel 64G(3)(a)(i) van die Wet, wat voorsiening maak vir
'n verminderde koers Dividendbelasting. Die doel van hierdie studie is om grense af te baken vir die bepaling van die uiteindelik
geregtigde van dividend inkomste binne die konteks van 'n diskresionêre trust, waar die
dividend betaal word ten opsigte van aandele gehou in 'n maatskappy wat ‘n inwoner is,
tot die mate dat die dividend nie bestaan uit 'n uitkering van 'n bate inspecie nie. Die
gevalle waar die verminderde tarief van toepassing is ingevolge artikel 64G(3) van die
Wet, sal vasgestel word.
Ten einde hierdie doelwitte te bereik, is 'n ontleding van die faktore wat in ag geneem
moet word om die uiteindelik geregtigde te definieer en te bepaal, onderneem. Gemeenen
siviele regs-definisies is ondersoek. Die ‘Organisation for Economic Co-operation and
Development’s (‘OECD’) Model Tax Conventions (MTCs’) en sy kommentare verskaf
moontlike faktore om te help in die identifisering van die uiteindelik geregtigde. In die
afwesigheid van 'n besluit deur 'n Suid-Afrikaanse hof, word die besluite in die vyf
internasionale hofsake geraadpleeg. Vier stappe is geformuleer om ʼn slotsom te bereik.
In terme van die stappe, bly die trustbegunstigde die uiteindelik geregtigde van die
dividendinkomste ontvang deur die trust, in die geval waar die inkomste uitgekeer word
deur die trustees nadat hul diskresie uitgeoefen is in terme van die trustakte. In die geval
van voorwaardelike begunstigdes, word dit gestel dat die trust, met die trustees wat in hul
amptelike hoedanigheid namens die trust optree, gesien word as die uiteindelik geregtigde
van die dividend inkomste.
In terme van artikel 64G(3), waar 'n buitelandse trustee of 'n buitelandse trustbegunstigde
as die uiteindelik geregtigde(s) van 'n dividend geïdentifiseer is, kan die koers waarteen Dividendbelasting weerhou word, verminder word as gevolg van die toepassing van 'n
dubbelbelastingooreenkoms.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/85648 |
| Date | 12 1900 |
| Creators | Engelbrecht, Waldette Anne |
| Contributors | Van Wyk, E., Stellenbosch University. Faculty of Economic and Management Sciences. School of Accounting. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 86 p. |
| Rights | Stellenbosch University |
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