corporate rules contain, amongst other things, special provisions
relating to the income tax consequences (including capital gains tax
consequences) of transactions between companies forming part of a "group
of companies”. Under qualifying circumstances, the corporate rules make
it possible for companies in such a group of companies to transfer
assets between each other without adverse tax consequences.
Income Tax Act contains two definitions of a "group of companies”,
namely, a general definition in section 1(1) which generally applies to
the Act as a whole and a narrower definition in section 41(1) which
applies to the corporate rules and a limited number of other provisions
in the Act. The definition in section 41(1) excludes certain companies
which might otherwise have qualified for relief under the corporate
SARS recently issued a Draft Interpretation
Note that provides guidance on the interaction of the definitions of a
"group of companies” contained in sections 1(1) and 41(1).
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.