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.
| Identifer | oai:union.ndltd.org:netd.ac.za/oai:union.ndltd.org:sun/oai:scholar.sun.ac.za:10019.1/21139 |
| Date | 12 1900 |
| Creators | Van Schaik, Rozelle |
| Contributors | Van Schalkwyk, L., Stellenbosch University. Faculty of Economic and Management Sciences. Dept. of Accountancy. |
| Publisher | Stellenbosch : Stellenbosch University |
| Source Sets | South African National ETD Portal |
| Language | en_ZA |
| Detected Language | English |
| Type | Thesis |
| Format | 118 p. |
| Rights | Stellenbosch University |
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