South Africa Case Law

XYZ CC v Commissioner for the South African Revenue Service (13285)

XYZ CC v Commissioner for the South African Revenue Service (13285) [2015] ZATC 4 (10 September 2015)

Court

Tax Court

Case number

13285

Judge

M P Tsoka

The court found that the loans advanced by XYZ CC to JK Property CC and LM CC were, in substance, disguised dividend distributions to Mr. B, the sole member of all three close corporations. The court held that close corporations cannot form part of a group of companies for purposes of the Income Tax Act, and thus the exemption provisions relied upon by XYZ CC were inapplicable. The facts indicated that the loans were interest-free, not repaid within the stipulated period, and lacked genuine repayment agreements, amounting to an anti-avoidance scheme. The court distinguished the ABC (Pty) Ltd…

Source excerpt

• Secondary Tax On Companies
• Deemed Dividends
• Connected Persons
• Interest Free Loans
• Anti Avoidance
• Onus Of Proof

ABC (Pty) Ltd v Commissioner for the South African Revenue Service (13512)

ABC (Pty) Ltd v Commissioner for the South African Revenue Service (13512) [2015] ZATC 5 (30 March 2015)

Court

Tax Court

Case number

13512

Judges

FHD van Oosten, S Makda, GC Koffman

The Tax Court held that interest-free intra-group loans were not deemed dividends subject to STC, applied the section 64C(4)(bA) exemption, and set aside the assessments.

• Secondary Tax On Companies
• Deemed Dividends
• Income Tax Act Interpretation
• Exemption Provisions
• Interest On Tax
• Connected Persons