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1
Brink, Sophia. "An evaluation of the income tax treatment of client loyalty programme transactions by South African suppliers." Journal of Economic and Financial Sciences 8, no. 1 (April 30, 2015): 145–64. http://dx.doi.org/10.4102/jef.v8i1.88.
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The popularity of client loyalty programmes has increased drastically over the past few years, with more than 100 suppliers in South Africa currently making use of them. Despite the fact that client loyalty programmes have been prevalent in South Africa since the 1980s, the South African Revenue Service has issued no specific guidance on the income tax treatment of client loyalty programme transactions. The main objective of the research was to determine whether South African client loyalty programme suppliers treat client loyalty programme transactions correctly for income tax purposes. In order to meet this objective, available local and international literature were analysed to determine the proposed income tax treatment of a client loyalty programme transaction expenditure incurred by supplier for purposes of the client loyalty programme. The proposed correct income tax treatment was compared with a survey circulated to a population of client loyalty programme suppliers in South Africa. The comparison indicated that in practice the Income Tax Act No. 58 of 1962 is treated differently from the proposed treatment. This incorrect tax treatment could result in possible financial loss to the client loyalty programme supplier as taxpayer.
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Makhaya, Siphamandla, and Lizanne Barnard. "Income tax implications from the transfer of soccer players in South Africa." Journal of Economic and Financial Sciences 10, no. 1 (June 6, 2017): 125–44. http://dx.doi.org/10.4102/jef.v10i1.9.
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Sports clubs often trade players with each other through the player transfer system. Using the doctrinal research methodology, which involves an extended review of literature, the study aims at providing an interpretative analysis of the income tax implications from the transfer of professional soccer players between professional soccer clubs, based on the Income Tax Act 58 of 1962 (South Africa, 1962) (hereafter the Act) and the relevant case law. This study further provides hypothetical case studies that provide different scenarios of soccer player transfers and the analysis of the income tax implications arising from the facts presented in each case study.
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Oosthuizen, Rudi. "A Framework For The Income Tax Deductibility Of Intellectual Property Expenditure Incurred By South African Taxpayers." International Business & Economics Research Journal (IBER) 12, no. 3 (February 19, 2013): 373. http://dx.doi.org/10.19030/iber.v12i3.7680.
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Taxpayers who use intellectual property (such as patents and trademarks) in their trade in the production of income may obtain the right of such use in a number of different ways. The nature of the transaction granting the taxpayer the use of intellectual property items determines the tax treatment thereof. Taxpayers may be able to claim deductions for the cost of using these items in terms of specific income tax sections or the general deduction formula as outlined by the Income Tax Act 58 of 1962. There are also a number of other sections in the Act which may affect the timing and extent of the deductions allowed. This article investigates the various income tax deductions which may be available to taxpayers in South Africa who make payments in respect of intellectual property. It considers the effect of important recent case law and changes to tax legislation on the timing and extent of these deductions and suggests a framework which can be applied to assist the taxpayer in understanding the structure of such deductions.
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Willemse, Leonard C. "Die inkomstebelastinghantering van aanvangsfranchisefooie betaalbaar in die Suid-Afrikaanse petroleumbedryf." Journal of Economic and Financial Sciences 4, no. 2 (October 31, 2011): 407–26. http://dx.doi.org/10.4102/jef.v4i2.328.
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A wholesaler of petroleum products is prohibited in terms of section 12(2)(c) of Regulation 287 of the Petroleum Products Act, No. 120 of 1977, to own a retail licence for purposes other than that of training. As a result, petroleum companies make use of franchises to sell their products. The concept of a franchise is based on the principle that a franchisee obtains the franchise of an existing, often prosperous, business from a franchisor, and then operates the business under the banner of this franchise. The franchisee pays the franchisor franchise fees as consideration for certain items or privileges obtained. This article investigates the deductibility of franchise fees in terms of the current South African Income Tax Act, No. 58 of 1962 and includes an evaluation of Australian Income Tax Act sections that might offer deduction possibilities for franchise fees if applied within a South African context.
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Willemse, Leonard C. "A critical analysis of the barriers to entry for small business owners imposed by Sections 12E(4)(a)(iii) and (d) and paragraph 3(b) of the Sixth Schedule Of The Income Tax Act, No. 58 of 1962." Journal of Economic and Financial Sciences 5, no. 2 (October 31, 2012): 527–46. http://dx.doi.org/10.4102/jef.v5i2.298.
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According to National Treasury’s Explanatory Memorandum on the Revenue Laws Amendment Bill, 2008, small businesses in South Africa are instrumental in the growth of the South African economy as they are a source of job creation and a counter to poverty. Research, however, indicates that small businesses face many obstacles, such as relatively high tax compliance costs. It was, therefore, proposed in the 2008 Budget Review that a turnover tax system be implemented for micro businesses with a turnover of up to R1 million per annum to simplify the tax compliance process. Similarly, section 12E was introduced earlier in the Income Tax Act No. 58 of 1962 to offer additional income tax relief to small business owners. Sections 12E(4)(a)(iii) and (d) and paragraph 3(b) of the Sixth Schedule, however, prevent certain small business owners from making use of these concessions. This article investigates these barriers to entry and explores possible solutions to the problems presented by them.
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Sturdy, Joline, and Christo Cronjé. "An analysis of the tax implications of prospecting expenditure incurred by junior exploration companies in South Africa." Journal of Economic and Financial Sciences 6, no. 2 (July 31, 2013): 329–46. http://dx.doi.org/10.4102/jef.v6i2.263.
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One of the consequences of the change in the mineral policy of South Africa with the promulgation of the Mineral and Petroleum Resources Development Act 28 of 2002 was the increase in junior exploration companies. Junior exploration companies are mainly involved in prospecting activities. No definition exists for either prospecting or exploration in the Income Tax Act 58 of 1962 (Income Tax Act). The lack of research and case law on the tax treatment of prospecting expenditure by junior exploration companies may result in various interpretations for the treatment of prospecting expenditure. Through critical analysis of specific sections in the Income Tax Act, applicable case law and relevant literature, it is evident that there are different interpretations by junior exploration companies of the treatment of prospecting expenditure from an income tax perspective. The perceived challenges with interpretation of the tax treatment of prospecting expenditure by junior exploration companies create an opportunity for further research.
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Padia, Nirupa, and Warren Maroun. "Determining the residency of companies: Difficulties in interpreting ‘place of effective management’." Journal of Economic and Financial Sciences 5, no. 1 (April 30, 2012): 119–34. http://dx.doi.org/10.4102/jef.v5i1.309.
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Even South Africa’s Income Tax Act No. 58 of 1962 uses the terminology ‘place of effective management’ when determining the residency of companies. This term is not, however, defined in the said legislation and there is no South African case law specifically dealing with this matter. In contrast, the United Kingdom (UK) uses the term ‘central management and control’, and its courts have been called upon to hear numerous cases on the interpretation of this phrase. Given the increasing pressure on South Africa to align its tax treatment with international trends as well as increased levels of trade with the United Kingdom, this study examined the interpretation of ‘place of effective management’ in a South African context and juxtaposed this with the conclusions reached in seven cases in the United Kingdom dealing with the interpretation of ‘centre of management and control’. The findings show that ‘place of effective management’ from a South African perspective may depend heavily on where decisions are implemented and day-to-day operations occur. ‘Central management and control’, however, appears to vest almost exclusively in where primary decisions are made or strategic directions emanate from.
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Maroun, Warren, Magda Turner, and Kurt Sartorius. "Does capital gains tax add to or detract from the fairness of the South African tax system?" South African Journal of Economic and Management Sciences 14, no. 4 (December 6, 2011): 436–48. http://dx.doi.org/10.4102/sajems.v14i4.131.
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This research seeks to add to the existing body of knowledge on the perceived impact of Capital Gains Tax (CGT) on the fairness of the South Africa Tax System. Building on the largely qualitative work done by Vivian (2006) and Smith (1776), this research makes use of an extensive literature review followed by a correspondence analysis to complement the existing body of research into this area. The literature review discuss the fairness criteria advanced by Smith (1776) (Smith’s tax canon) and identify ‘unfairness characteristics’ of CGT. The correspondence analysis only tests the theories advanced in the literature review and revealed that there are potential sources of unfairness inherent in the Eighth Schedule to the Income Tax Act No. 58 of 1962 (the Eighth Schedule). These include the possibility that that CGT gives rise to double tax and imposes a high burden on taxpayer’s ability to bear the tax load.
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Straus, Carien, and Leonard Willemse. "A critical investigation of the interaction between sections 8(4)(a), 9H and paragraph 40 of the eighth schedule of the income tax act No. 58 of 1962 versus the current practice of The South African Revenue Service." Journal of Economic and Financial Sciences 7, no. 3 (October 31, 2014): 889–906. http://dx.doi.org/10.4102/jef.v7i3.242.
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Section 9H and paragraph 40 of the Eighth Schedule of the Income Tax Act No. 58 of 1962 (‘the Act’) determines that a person is deemed to dispose of all of his assets (bar a few exceptions) at market value when that person ceases to be a South African resident or passes away, respectively. This deemed disposal is treated as a disposal event for capital gains tax purposes in terms of the Eighth Schedule of the Act. The question that arises is whether this deemed disposal event gives rise to a recoupment in terms of section 8(4)(a). In practice there currently seems to be uncertainty with regard to this issue, as there are different interpretations and applications of these provisions. This article investigates the interaction between sections 8(4)(a), 9H and paragraph 40 of the Eighth Schedule in order to determine whether a section 8(4)(a) recoupment should be included, or not, in the taxpayer’s gross income according to paragraph (n) of the gross income definition found in section 1 of the Act.
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Engelbrecht, Waldette. "The beneficial owner of dividend income received by a discretionary trust." Journal of Economic and Financial Sciences 8, no. 1 (April 30, 2015): 281–304. http://dx.doi.org/10.4102/jef.v8i1.95.
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In terms of the new Dividends Tax, which came into effect on 1 April 2012, Dividends Tax may be the liability of the beneficial owner of the dividend. This makes it important to correctly identify the beneficial owner. The term beneficial owner is specifically defined in section 64D of the Income Tax Act No. 58 of 1962 as ‘the person entitled to the benefit of the dividend attaching to the share’, yet a distinct difference remains between the legal ownership and economic ownership of the share. Within a South African context, determining the beneficial owner within a discretionary trust might be problematic. The trustees are the legal owners of the shares, whilst the beneficiaries might be the economic owners of the shares. Further, consideration has to be given to the timing of the dividend distribution. This article formulates steps to determine which person is entitled to the benefit of the dividend attached to the share.
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Brink, Sophia. "Inkomstebelastinghantering van korting ontvang in die hande van 'n nie-handeldrywende persoon." Journal of Economic and Financial Sciences 7, no. 1 (April 30, 2014): 213–30. http://dx.doi.org/10.4102/jef.v7i1.137.
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For income tax purposes, a taxpayer operating a business will account for discount received differently from a taxpayer not operating a business. When a taxpayer operating a business obtains goods or services at a discount, the taxpayer can claim a section 11(a) deduction at the value of the goods or services, net of the discount received. The discount reduces the value of the net reduction of taxable income and the taxpayer is effectively taxed on the discount received. A taxpayer who is not operating a business will not qualify for a section 11(a) deduction (read together with section 23(g)) for goods or services obtained (it does not meet the requirements ‘for the purposes of trade’ and ‘in the production of income’). Discount received in the hands of a non-trading person (often a natural person) is currently not subject to normal South African income tax. The main objective of this article is to investigate whether the existing provisions in the Income Tax Act No. 58 of 1962 and related case law provide a basis for taxing discount received in the hands of the non-trading individual. In order to meet this objective, local literature was analysed to determine the correct income tax treatment and it was found that discount received by a non-trading person meets all the requirements of the ‘gross income’ definition and consequently should be taxable.
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Barkhuizen, Gerhard, and Leonard Willemse. "The impact of the deletion of section 11 (bA) on the deductibility of pre-production raising fees incurred raising fees in the expansion of an existing trade." Journal of Economic and Financial Sciences 8, no. 2 (July 30, 2015): 648–65. http://dx.doi.org/10.4102/jef.v8i2.114.
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Section 11(bA) was recently deleted and replaced by section 11A in the Income Tax Act No. 58 of 1962 (“the Act” – all references to sections and paragraphs hereafter refer to the Act, unless otherwise indicated). Section 11(bA) and section 11A determined the income tax treatment of qualifying pre-production interest incurred. The article focused on whether or not pre-production raising fees incurred by the taxpayer during the expanding of an existing trade will be deductible in terms of section 11(bA) or section 11A. Section 11(bA) and section 24J allow for the deduction, in certain circumstances, of interest or related finance charges. In the recently decided C:SARS v South African Custodial Services (Pty) Ltd 2012 (1) SA 522 (SCA), 74 SATC 61 (“SA Custodial”) it was found by the court that raising fees can be read under the phrase interest or related finance charges in terms of section 11(bA). The question arose whether or not the taxpayers are being disadvantaged by the fiscus through the deletion of section 11(bA) and its replacement by section 11A, especially in regard to pre-production raising fees incurred during the expansion of an existing trade. This article investigates the interaction between sections 11(bA), 11A and 24J of the Act in order to determine the difference in the income tax treatment between these sections for the pre-production raising fees incurred. The result of the investigation into the interaction of these sections will indicate whether or not the taxpayer is being disadvantaged by the fiscus through the deletion of section 11(bA) and its replacement by section 11A.
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Moosa, Fareed. "Consequences for Non-Payment of PAYE and VAT Compared." Potchefstroom Electronic Law Journal 23 (November 3, 2020): 1–27. http://dx.doi.org/10.17159/1727-3781/2020/v23i0a7791.
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This article shows that, whereas a bilateral legal relationship exists between the South African Revenue Service (SARS) and a vendor in relation to value-added tax (VAT), a tri-partite legal relationship exists among the SARS, employees and employers in relation to Pay As You Earn (PAYE). This article shows further that employers are, as withholding agents of PAYE, in the same legal position as vendors as regards VAT, namely, they are not in a trust or agency relationship with the SARS. Rather, this article argues that PAYE is in the nature of trust funds held by employers on behalf of employees from whose remuneration it is deducted. Since the employees retain ownership of the PAYE deducted, this article argues that employees have locus standi to lay a charge of theft against employers who misappropriate PAYE. Such a charge of theft is not grounded in tax administration. This article shows further that, as the law presently stands, a charge of theft falls outside the ambit of the remedies available to the SARS against employers and vendors who default in remitting PAYE or VAT. The Tax Administration Act, 2011 read with the Income Tax Act, 1962 and Value-Added Tax Act, 1991 codified only a limited range of criminal sanctions and administrative penalties that may be imposed against a defaulting employer or vendor. If theft is to be included, then a legislative amendment is required.
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Kanamugire, Jean Chrysostome. "A Critical Analysis of Tax Avoidance in the South African Income Tax Act 58 of 1962, as Amended." Mediterranean Journal of Social Sciences, July 1, 2013. http://dx.doi.org/10.5901/mjss.2013.v4n6p351.
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Van Wyk, Danielle, and Mareli Dippenaar. "A critical analysis of the meaning of the term ‘income’ in Sections 7(2) to 7(8) of the Income Tax Act No. 58 of 1962." South African Journal of Economic and Management Sciences 20, no. 1 (April 26, 2017). http://dx.doi.org/10.4102/sajems.v20i1.1560.
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Background: Section 7 of the Income Tax Act 58 of 1962 (the Act) was introduced as an anti-avoidance measure to prevent tax avoidance by means of a donation, settlement or other disposition in various types of schemes. In terms of this section, in certain circumstances, ‘income’ is deemed to be income received by or accrued to a taxpayer. Despite the fact that the term ‘income’ has been used in Section 7 from the time that it was first introduced into the Act and the fact that it is defined in section 1 of the Act, there still remains uncertainty regarding the intention of the legislature and the actual meaning of the term in terms of Section 7.Aim: The objective of the study is to understand whether the term ‘income’, as used in Sections 7(2) to 7(8) of the Act, is used in its defined sense or if it should be ascribed a different meaning.Setting: This article examines existing literature in a South African income tax environment.Method: A non-empirical study of existing literature was conducted by performing a historical analysis within a South African context. A doctrinal research approach was followed.Results: Possible interpretations determined include ‘income’ as defined in section 1 of the Act, namely ‘gross income’ (also defined) less exempt income, ‘gross income’, profits and gains or ‘taxable income’ (i.e. ‘income’ less allowable expenditure, deductions and losses) and ‘gross income’ less related deductible expenses and losses.Conclusion: It was found that the meaning of ‘income’, for purposes of Sections 7(2) to 7(8), remains an uncertainty, and it is recommended that the wording of Section 7 be amended to reflect the intended meaning thereof.
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Pienaar, SJ, and TL Steyn. "South African Income Tax Implications For Income Earned In Virtual Worlds." Journal of Applied Business Research (JABR) 26, no. 2 (November 16, 2010). http://dx.doi.org/10.19030/jabr.v26i2.284.
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<p class="MsoNormal" style="text-align: justify; margin: 0in 36.1pt 0pt 0.5in; mso-pagination: none;"><span style="font-family: "Times New Roman","serif"; font-size: 10pt; mso-bidi-font-weight: bold;" lang="EN-ZA">There has been a significant increase in the number of internet business and e-commerce transactions over the last few years.<span style="mso-spacerun: yes;"> </span>More recently, the development of virtual worlds on the internet has become an important feature of the business environment.<span style="mso-spacerun: yes;"> </span>Although some research has been conducted in the United States of America into the tax consequences of income earned in virtual worlds, no such research has been conducted in South Africa.<span style="mso-spacerun: yes;"> </span>This study adds to the American research by providing a critical analysis of the topic from the South African tax perspective.<span style="mso-spacerun: yes;"> </span>The specific aim of the study was to determine whether income earned by South African residents from structured and unstructured virtual worlds respectively would qualify as gross income in terms of the South African Income Tax Act </span><span style="font-family: "Times New Roman","serif"; font-size: 10pt;" lang="EN-ZA">58 of 1962.<span style="mso-spacerun: yes;"> </span>It builds on previous international research, but offers a new perspective from the South African point of view. The study will make a valuable theoretical contribution to the application of the basic principles of gross income, and will deal with a brand new concept which did not exist when the principles were laid down.<span style="mso-spacerun: yes;"> </span>The research was limited to determining whether the income earned in virtual worlds by South African residents who are taxed on their world-wide income would be included in gross income as defined by the South African Income Tax Act.<span style="mso-spacerun: yes;"> </span>Capital gains tax consequences were not considered in any transaction where the income was classified as being of a capital nature.<span style="mso-spacerun: yes;"> </span>Also excluded were deductions available to taxpayers in terms of the income included in gross income, and there is no detailed discussion<span style="mso-spacerun: yes;"> </span>on when a taxpayer would be regarded as engaging in virtual worlds as a hobby as opposed to conducting a business.<span style="mso-spacerun: yes;"> </span>Future research could be extended to this particular area.<span style="mso-spacerun: yes;"> </span>This research concluded that most transactions in virtual worlds resulting in income would qualify as gross income under the South African Income Tax Act.<span style="mso-spacerun: yes;"> </span>At this stage, the only possible disqualification in terms of the South African gross income definition appears to be income received “of a capital nature”.</span></p>
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Coertze, Johan. "DEVELOPING THE SUBSTANCE OVER FORM DOCTRINE IN TAXATION AFTER THE JUDGEMENT IN COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE v NWK." Pretoria Student Law Review, no. 12 (2018). http://dx.doi.org/10.29053/pslr.v12i.1891.
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In 1936 Lord Tomlin in IRC v Duke of Westminster (hereafter ‘Duke’)1 concluded that it is trite law that every man (and woman) is entitled to arrange his or her affairs as to pay the least amount of tax under the appropriate statutes. This sentiment has been a cornerstone of South African tax jurisprudence and was again repeated in Commissioner for the South African Revenue Service v NWK Ltd (hereafter ‘NWK’).2 This broad liberty in arranging one’s own tax affairs has, however, led some taxpayers to dress up their transactions and hide their’ true nature as to ‘either … secure some advantage which otherwise [the law] would not give, or to escape some duty which otherwise the law would impose’.3 The most prominent tool the courts can use to try and curb this type of abuse is the General Anti-Avoidance Rules (hereafter ‘GAAR’) in Section 80A to 80L of the Income Tax Act 58 of 1962 (hereafter ‘the Act’), other specific anti-avoidance provisions in the Act4 and the substance over form doctrine (hereafter ‘the doctrine’). This article is a reflection on the taxation in South Africa, but specifically anti-avoidance provisions as provided by legislation.
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Thambi, K. "Benhaus - a landmark decision, one less hoop for contract miners but a clarion call for an overhaul of the South African mining regime." Journal of the Southern African Institute of Mining and Metallurgy 120, no. 8 (2020). http://dx.doi.org/10.17159/2411-9717/1031/2020.
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SYNOPSIS The mining industry has evolved, such that the means of production that were once in the hands of major players or power houses have become equally accessible to smaller entrants, i.e. junior mining companies and contract miners. Contract mining involves contractual relationships between mine owners or mineral right holders and third parties to conduct mining activities on behalf of the right holders. The current mining income tax legislation has been a considerable obstacle to contract miners. Under its terms, they have been viewed as mining on behalf of third-party mineral rights holders. As such, expenditure incurred in relation to contract mining activities was often disallowed by the South African Revenue Service (SARS). However, the recent judgement of the Supreme Court of Appeal, Benhaus Mining (Pty) Ltd v CSARS 2020 (3) SA 325 (SCA) (Benhaus), rightfully or wrongfully, appears to provide clarity regarding the fate of contract miners' involvement in the mining value chain. The taxpayer, a contract miner, was held to be conducting mining operations within the meaning of S15(a) read with si of the Income Tax Act 58 of 1962 (the Income Tax Act). This paper looks at how contract mining has traversed the mining tax landscape, the implications of the Benhaus judgment, and stresses the necessity for clear policy reform to the mining tax regime and equally to legislation framed to give effect to these policies. Keywords: Contract mining, owner mining, tax, DMRE, mining regime reforms.
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Gluckman, Adam, and Magda Turner. "The perceived fairness of turnover tax." Journal of Economic and Financial Sciences 11, no. 1 (August 29, 2018). http://dx.doi.org/10.4102/jef.v11i1.174.
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The South Africa Turnover Tax system, implemented on 01 March 2009 to simplify tax for microbusinesses and to improve tax compliance had an insignificant number of registrations and research indicated that a possible reason is the fairness of the tax. The aim of this study is to explore the perceived fairness of the Turnover Tax system. By way of a literature review, criticisms and provisions of the Sixth Schedule to the Income Tax Act No. 58 of 1962 were identified and used as statements on a survey questionnaire. Using the principles of a fair tax system as advanced by Adam Smith a correspondence survey which included two open-ended questions was issued to participants with knowledge of Turnover Tax to establish whether the statements corresponded to any of Adam Smith’s Maxims. The results reveal that the Turnover Tax system is not perceived as completely fair and encourage Government to relook at the legislation with the intend to simplify it further, to removing ambiguity and add detailed lists of excluded services. Education and training of taxpayers is important. A repetition of this study on taxpayers registered on the Turnover Tax system will make further contribution and add to the insight into the fairness of the Turnover Tax system provided by this article.
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Fareed Moosa. "A PLEA OF DOUBLE JEOPARDY BY ACCUSED EMPLOYERS: ARE THERE LIMITS?" Obiter 42, no. 2 (August 3, 2021). http://dx.doi.org/10.17159/obiter.v42i2.11927.
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The rule against double jeopardy entails that, generally, a person cannot be charged more than once for the same, or substantially the same, offence or misconduct in respect of which he or she has been convicted or acquitted. Under the Constitution of the Republic of South Africa, 1996, this rule is part of an accused’s right to a fair trial. This article shows that every employer prosecuted for allegedly not complying with either employees’ tax obligations in the Fourth Schedule of the Income Tax Act 58 of 1962, or for an offence at common law, is entitled to raise the procedural defence of double jeopardy. This article argues that the recent judgment in Grayston Technology Investment (Pty) Ltd v S is authority for the proposition that, in any such prosecution, an accused employer may invoke double jeopardy, even if the prior punishment or acquittal stems from non-criminal proceedings under the Tax Administration Act 28 of 2011 before the Tax Court or the Tax Board. A key hypothesis of this article is the argument that double jeopardy ought not to be applied as an inflexible procedural rule in every instance. This is because such an approach would lead to the undesirable result of undermining the Legislature’s objective in catering for criminal and civil sanctions in respect of certain violations of fiscal legislation. No hard-and-fast rules can be laid down in advance as to when double jeopardy may be successfully invoked. Each case needs to be decided on its own facts. It is contended that when a court decides whether to uphold a double-jeopardy defence, it must strike an equitable balance between, on the one hand, the accused employer’s fundamental right to a fair trial and, on the other, society’s legitimate interest in ensuring that taxpayers comply with their tax obligations on pain of adequate punishment for non-compliance.
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Erasmus, Daniel N. "An Analysis of Challenging the Commissionerrs Discretionary Powers Invoked in Terms of Sections 74A and 74B of the Income Tax Act 58 of 1962, in Light of the Constitution of the Republic of South Africa 108 of 1996." SSRN Electronic Journal, 2013. http://dx.doi.org/10.2139/ssrn.2426754.
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Nel, Rudie, and Nicolette Klopper. "Donations in kind: An investigation of the value for purposes of section 18A of the Income Tax Act." Journal of Economic and Financial Sciences 12, no. 1 (July 29, 2019). http://dx.doi.org/10.4102/jef.v12i1.418.
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Orientation: The tax deductibility of donations in kind in terms of the Income Tax Act No. 58 of 1962 in South Africa.Research purpose: The aim of this article is to critically analyse the provisions of section 18A(2)(a)(v) of the Income Tax Act No. 58 of 1962 to determine the value, if any, to be indicated on a section 18A receipt. It is also investigated whether the donee or donor is responsible for determining the fair market value, if such value should be included on a section 18A receipt.Motivation for the study: Addressing uncertainty regarding which amount, if any, should be included on a section 18A receipt for tax purposes in respect of a donation in kind.Research design, approach and method: This article involves a non-empirical interpretative analysis of tax legislation and other literature. The mode of inquiry for the article is qualitative in nature and follows a doctrinal method, which is closely associated with tax research.Main findings: This article highlights the possible ambiguity in the interpretation of section 18A(2)(a)(v) of the Income Tax Act No. 58 of 1962 and that the term ‘nature’ could be construed as including a value.Practical/managerial implications: The donor would have certain tax implications preceding a section 18A deduction which would require the donor to determine the fair market value and could enable the donor to also indicate such fair market value in respect of a donation in kind to the donee.Contribution/value-add: This article contributes to literature by highlighting the uncertainty in respect of the interpretation of tax legislation relating to section 18A.