Authors: Alan Keep and Mogola Makola (Bowman Gilfillan Inc.)
The corporate tax work of the past year has been mixed. There have been a number of corporate restructuring transactions, refinancing of debt push down transactions and a number of transactions involving share repurchases by companies as a means of enabling shareholders to exit companies. We have also seen an increasing number of enquiries by the South African Revenue Service ("SARS") based on the General Anti-Avoidance Rules. As stated above, there have also been a number of transactions involving share repurchases by companies as a means of enabling shareholders to exit companies. The share repurchase became a favoured way of exiting a company, particularly for South African resident company shareholders, where the proceeds of the share repurchase were treated as a dividend for the purposes of the Income Tax Act ("ITA").
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.