TLAB: Debt conversion into equity proposals

28th September 2017

TLAB: Debt conversion into equity proposals

On 26 September 2017, Webber Wentzel participated in the workshop hosted by National Treasury on the proposed changes in the draft Taxation Laws Amendment Bill, 2017 (TLAB) on converting debt to equity. These proposed amendments in the draft TLAB are in sections 19, new sections 19A and 19B, and paragraph 12A of the Eighth Schedule in the Income Tax Act 58 of 1962.

It appears that National Treasury is considering the following changes in the final bill on the debt conversion into equity proposals:

Generally, National Treasury's revised proposals and clarifications in the workshop were preferred to those contained in the draft TLAB.  In particular, the removal of sections 19A and 19B from the draft TLAB is to be welcomed.  National Treasury also indicated that further refinements would be made to the proposals.

National Treasury also indicated that they were working towards introducing the final bills at Parliament on 25 October 2017, which is the date that the Finance Minister, Malusi Gigaba, is expected to present the Medium Term Budget Policy Statement.

Written By Wesley Grimm and Joon Chong from Webber Wentzel