'n Ondersoek na die benadering vir die toetsing van die besigheidsdoelwittoets in die normaliteitsvereiste van artikel 103(1) van die Inkomstebelastingwet, no 58 van 1962, soos gewysig gedurende 1996

Date
1999-10
Journal Title
Journal ISSN
Volume Title
Publisher
Stellenbosch : Stellenbosch University
Abstract
ENGLISH ABSTRACT: The Katz Commission made recommendations in the Third Interim Report on the general anti-avoidance legislation in section 103 of the Income Tax Act. The following recommendations were incorporated in section 103 of the Income Tax Act with effect from 3 June 1996. Subsection (b)(i) of section 103(1) was amended in order to distinguish between transactions in the context of business and other transactions, when the normality of the manner in which a transaction was carried out, is determined. An additional requirement, the so-called business purpose test, is laid down for transactions in the context of business. This business purpose test is contained in subsection (b)(i)(aa) of section 103(1) and requires that transactions in the context of business must be carried out in a manner normally employed for bona fide business purposes, other than the obtaining of a tax benefit. Subsection (6) was incorporated in section 103. This subsection prohibits the Commissioner from excercising his discretion in terms of section 89quat(3) and (3A) of the Income Tax Act, if section 103( 1) was applied to determine the liability for any tax imposed by the Income Tax Act. The purpose of this study was dual: • Firstly, it was to determine to what extent the previous approach laid down by South African case-law for the testing of normality in the case op possible tax avoidance, was expanded for the new business purpose requirement in section 103(1) of the Income Tax Act. • Secondly, the fairness and constitutionality of subsection (6) were examined. The approach laid down by South African case-law for applying the normality test in section 103(1)(b) before the 1996 amendment, as well as the interpretation of the business purpose test to the letter of the Act, was examined. This research was used to determine whether the previous approach for the application of the previous normality requirement needed to be expanded to accommodate the new business purpose test. The English approach to control tax avoidance was investigated in order to identify an approach which comprise the application of a business purpose test which can provide guidelines for the application of the new business purpose test. Recent case-law on tax avoidance was studied to determine whether the previous approach for applying the normality test was expanded to include the application of English law principles in the application of the business purpose test. The conclusion arrived at in this study is that the previous approach to applying the normality requirement was expanded. The business purpose test for transactions in the context of business, eliminates the possibility of transactions being regarded as normal, merely because it is frequently employed in the business community to avoid tax. The judgement in ITC 1606 ((CAPE 1995) 58 SATC 328) materially expanded the previous approach in applying the normality requirement. It is concluded that the principle laid down in ITC 1606, leads to the application of the English case, Furniss v Dawson, in the business purpose test of the normality requirement of section 103(1), in respect of a series of transactions. The Constitution of the Republic of South Africa (1996) and the opinions of the Katz Commission and tax specialists were studied to assess the fairness and constitutionality of subsection (6). The author concluded that subsection (6) is unfair and in contravention of the Constitution.
AFRIKAANSE OPSOMMING: Die Katz-kommissie het in die Derde Interim Verslag aanbevelings ten opsigte van die algemene teenvermydingsbepaling in artikel 103 van die Wet, gemaak. Sekere gedeeltes van die aanbevelings is met ingang 3 Julie 1996 in artikel 103 van die Wet, soos gewysig, opgeneem. Subartikel (b )(i) van artikel 1 03( 1 ) is gewysig sodat die normaliteit van die wyse waarop transaksies aangegaan is, verdeel is tussen transaksies in die konteks van besigheid en ander transaksies. 'n Bykomende vereiste, die sogenaamde besigheidsdoelwittoets, is gestel ten opsigte van transaksies in die konteks van besigheid. Hierdie besigheidsdoelwittoets word vervat in subartikel (b)(i)(aa) van artikel 103 en vereis dat transaksies in die konteks van besigheid op 'n wyse aangegaan moet wees, wat normaalweg vir bona fide-sakedoeleindes anders as die verkryging van 'n belastingvoordeel, gebruik word. Subartikel (6) is tot artikel 103 gevoeg. Die subartikel bepaal dat, waar die Kommissaris artikel 103(1) in die bepaling van belastingaanspreeklikheid toegepas het, hy nie sy diskresie in terme van artikel 89quat(3) en (3A) van die Wet mag uitoefen nie. Die doel van hierdie studie was tweeledig: • Eerstens is vasgestel in watter mate die vorige benaderings in SuidAfrikaanse regspraak, neergele vir die toetsing van normaliteit by moontlike belastingvermyding, uitgebrei is vir die toetsing van die nuwe besigheidsdoelwitvereiste in artikel 103(1) van die Wet. • Tweedens is die regverdigheid en grondwetlikheid van subartikel (6) krities ondersoek. Die benadering wat deur Suid-Afrikaanse regspraak neergele is vir die toepassing van die normaliteitstoets in artikel 103(1)(b), voor die 1996- wysiging, sowel as die interpretasie van die besigheidsdoelwittoets volgens die letter van die Wet, is ondersoek. Die ondersoek is gebruik om te bepaal of die neergelegde benadering vir die toetsing van die vorige normaliteitsvereiste, uitgebrei moet word om die besigheidsdoelwittoets te akkommodeer. Die Engelse benaderings om belastingvermyding te bekamp, is ondersoek om benaderings te identifiseer wat die toepassing van 'n besigheidsdoelwittoets behels en gevolglik riglyne vir die toetsing van die besigheidsdoelwitvereiste kan verskaf. Onlangse hofsake wat oor belastingvermyding handel, is ondersoek om vas te stel of die beginsels soos in die verlede neergele, uitgebrei is, sodat Engelse regsbeginsels in die toekoms gebruik sal word om die nuwe besigheidsdoelwitvereiste in artikel 103(1) te toets. Die skrywer het tot die slotsom gekom, dat die vorige benadering vir die toetsing van normaliteit vir doeleindes van artikel 103(1), uitgebrei is, deurdat die besigheidsdoelwittoets ten opsigte van transaksies in die konteks van besigheid, die moontlikheid uitskakel dat transaksies as normaal beskou word bloot omdat dit normaalweg in die handelswereld gebruik is om belasting te vermy. Die gevolgtrekking word verder gemaak dat die vorige benadering vir die toetsing van die normaliteitsvereiste wesenlik in ITC 1606 ((CAPE 1995) 58 SATC 328) uitgebrei is. Die skrywer is van mening dat die beginsel wat in ITC 1606 neergele is, tot die toepassing van die Engelse saak, Furniss v Dawson, in die besigheidsdoelwittoets van die normaliteitsvereiste van artikel 103(1), ten opsigte van 'n reeks transaksies, lei. Die toepaslike artikels van die Grondwet van die Republiek van Suid-Afrika (1996) en die menings van die Katz-kommissie en erkende belastingkundiges is ondersoek. Die skrywer het tot die slotsom gekom dat subartikel (6) onregverdig is en met die Grondwet bots.
Description
Study project (M.Rek.) -- University of Stellenbosch, 1999.
Keywords
Income -- South Africa, Taxation -- Law and legislation -- South Africa, Tax evasion -- South Africa, Dissertations -- Accountancy, Business purpose test -- South Africa, Normality testing -- South Africa
Citation