http://www.polity.org.za
Deepening Democracy through Access to Information
Home / Press Office / Webber Wentzel RSS ← Back
Africa|Finance|Webber Wentzel|Africa|South Africa|Joon Chong
Africa|Finance||Africa||
africa-company|finance|webber-wentzel|africa|south-africa|joon-chong
Close

Email this article

separate emails by commas, maximum limit of 4 addresses

Verification Image. Please refresh the page if you cannot see this image.

Sponsored by

Close

Article Enquiry

Submissions on the draft Taxation Laws Amendment Bill

Verification Image. Please refresh the page if you cannot see this image.
Close

Embed Video

Submissions on the draft Taxation Laws Amendment Bill

15th September 2017

SAVE THIS ARTICLE      EMAIL THIS ARTICLE

Font size: -+

Joon Chong, Partner in the Webber Wentzel Tax Team, made oral submissions on the draft Taxation Laws Amendment Bill, 2017 on 29 August 2017 at the public hearings to Parliament's Standing Committee of Finance. Submissions were made on the proposed new section 25BC which had the unintended impact that philanthropic distributions made to South Africans could be subject to income tax.

The new section 25BC is linked to the new definition of "controlled foreign company" (CFC) which provides that a CFC includes any foreign trust or foundation that holds more than 50% of the participation rights in a foreign company and where one or more resident individuals hold an interest in the foreign trust or foundation. Section 25BC proposes to include any distributions received by such resident from the foreign trust or foundation to be included in income and subject to income tax.

Submissions were made that resident individuals who are beneficiaries of foreign family trusts or foundations receiving philanthropic distributions could see those distributions being subject to income tax where the trusts or foundations hold more than 50% in foreign companies. Further, the source of income from which the trust or foundation made the distribution had no impact on whether the distribution was included in the beneficiary's income. All distributions would be included in income, even if the source of distribution was from a source unrelated to the foreign company in which the trust or foundation holds more than 50%. The existing exclusions relevant to CFC and the foreign dividend exemption (if more than 10% is held) also had no impact on whether the distributions were included in the income of the beneficiaries.

A request was made to the National Treasury to delay the introduction of the new definition of CFC and section 25BC, to allow for more research into comparable jurisprudence.

If the new definition of CFC and section 25BC appears in the final bill, it is sincerely hoped that the wording in the final bill would not be as expansive as the current wording in the draft bill. It is hoped that long-standing family trusts used for estate planning and income protection of family members living in multiple countries (including South Africa) would also not be caught in the wording of these amendments in the final bill.

Advertisement
To watch Creamer Media's latest video reports, click here
 
Advertisement

EMAIL THIS ARTICLE      SAVE THIS ARTICLE ARTICLE ENQUIRY

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here

Comment Guidelines

About

Polity.org.za is a product of Creamer Media.
www.creamermedia.co.za

Other Creamer Media Products include:
Engineering News
Mining Weekly
Research Channel Africa

Read more

Subscriptions

We offer a variety of subscriptions to our Magazine, Website, PDF Reports and our photo library.

Subscriptions are available via the Creamer Media Store.

View store

Advertise

Advertising on Polity.org.za is an effective way to build and consolidate a company's profile among clients and prospective clients. Email advertising@creamermedia.co.za

View options
Free daily email newsletter Register Now