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Tax treatment of share schemes to be revisited

17 June 2015   (0 Comments)
Posted by: Author: Amanda Visser
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Author: Amanda Visser (Moneyweb)

Described as one of the most complicated sections in the Income Tax Act.

The section dealing with the tax treatment of employee share schemes has been described as one of the most complicated sections in the Income Tax Act.

This has led to different interpretations by tax collectors and taxpayers, resulting in double taxation for employees and tax inequality for employers in some instances.

It has also led to several amendments over the past five years to rid the market of share schemes that have been designed to technically circumvent the legislation to bring inequality in the tax treatment of taxpayers not privy to these schemes.

National Treasury has acknowledged that Section 8C needs to be revisited and some amendments may be proposed in future draft legislation.

The section deals with any share scheme whereby an employee or a director acquires the rights to purchase shares in the employer company by virtue of his employment.

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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.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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