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Examination of residence based taxation and its effect on cross border preference share transactions

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dc.contributor.advisor Prof. K. Jordaan en_US
dc.contributor.author Van der Spuy, Phia
dc.date.accessioned 2012-08-08T08:55:20Z
dc.date.available 2012-08-08T08:55:20Z
dc.date.issued 2012-08-08
dc.date.submitted 2002
dc.identifier.uri http://hdl.handle.net/10210/5444
dc.description M. Comm. en_US
dc.description.abstract The objective of the study is to critically evaluate the process of implementation of the residence—based system of taxation in South Africa and to evaluate whether the South African Revenue Service achieved their goals mentioned above through the implementation of this complex, sophisticated system of taxation. A well known cross border preference share structure will be utilised to illustrate the effect of the changes from a source to a residence taxation system. In order for a residence-based taxation system to be effective, it is essential that it draws into the tax net income earned by South Africanowned foreign entities (principally South African-owned foreign subsidiaries). If such income is not taxed, it is easy for South African residents to avoid tax by shifting their income to foreign entities in tax havens and preferential regimes, in which event the income earned by the foreign entity will be subjected to South African taxation only when repatriated as a dividend (Jooste, 2001:473-502). An efficient residence-based system spurns such a delay or deferral of taxation because taxpayers often delay repatriation for years, or never repatriate funds at all. This was exactly what the South African Revenue Service wanted to achieve through the introduction of the full-blown residence-based taxation system. The South African taxation system was based on a pure source system. Gradual changes in the economic environment necessitated certain amendments to the South African Income Tax Act to ensure that South Africa protects its tax base. Even though the residence based system of taxation was implemented over a number of years since 1997, numerous problems are still being encountered with the practical application of this complex system of taxation. South Africa's participation as a global player is examined from a tax perspective and practical application issues are examined. The taxation of foreign dividends introduced with effect 22 February 2002 serves as an example of the major impact that these changes had on cross-border structuring. Although this only serves as an example of the extent of the impact, various other cross-border structuring have been drastically impacted by these changes. en_US
dc.language.iso en en_US
dc.subject Taxation - South Africa en_US
dc.subject Income tax - Law and legislation - South Africa en_US
dc.subject Tax rebates - Law and legislation - South Africa en_US
dc.subject Income tax - South Africa en_US
dc.subject South Africa. Income Tax Act (1962) en_US
dc.title Examination of residence based taxation and its effect on cross border preference share transactions en_US
dc.type Thesis en_US

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