A group income tax system for South Africa

This thesis establishes a group income tax system for South Africa so that equity may be achieved between the burden of company income tax borne by shareholders who invest in companies that are structured through subsidiaries and shareholders that invest in companies that are structured through divisions. For example, intercompany profits and losses of a revenue nature are subject to income tax whereas interdivisional profits or losses of a revenue nature are not subject to income tax. Also, tax losses incurred by a company are not deductible from taxable income of other companies within the same group whereas in the case of a company that is structured through divisions losses incurred by a division are deductible from income of other divisions of the same company. The study is classified as 'microcomparison' whereby legal problems that exist in one country are studied on a comparative legal basis. Accordingly, the objective of the thesis is achieved by undertaking a comparative study of group income tax law in the United Kingdom and United States of America for equitable group income tax treatment of problems that exist within the current South African company income tax system. First, the definition of 'a group' is established, after which a group income tax treatment of group transactions and tax losses is established to eliminate the inequities that are inherent in the South African income tax system. Throughout the study it is demonstrated that these inequities exist in spite of the current income tax avoidance provisions (for example s103 and the connected persons rules). The conclusions made in the study indicate that the inequity that exists in the South African company income tax system should be eliminated.

Grantor dc:publisher.institution

College of Accounting

Year dc:date.issued

1997

Author dc:creator

• Mahuma, Keaobaka Percival

Advisors dc:contributor.advisor

• Botha, Derek
• Haupt, Phillip

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/11427/17345

OAI identifier oai:identifier

oai:open.uct.ac.za:11427/17345