Share value shifting: a comparison between the anti-avoidance provisions in South African and Australian tax legislation
Date
2007-02
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Juta Law Publishing
Abstract
INTRODUCTION: For as long as countries have imposed capital gains tax (CGT), taxpayers
have been looking for ways of transferring economic value without becoming
liable to pay it. Since CGT is usually triggered by the realisation of an asset,
taxpayers soon realised that if they could shift economic value from their assets
without selling or otherwise realising the assets, they could avoid, or at least
defer, CGT. This led to the notion of share value shifting, which achieves this
objective in relation to shares. Taxation authorities in turn recognised the danger
which this form of tax avoidance holds for the integrity of a CGT regime
and the need for measures to counter it.
At the outset the article provides some background on what share value
shifting is and how anti-avoidance measures generally aim to prevent this form
of tax avoidance. It also explains the scope of the anti-avoidance measures in
the South African and Australian tax legislation and the manner in which the
measures are incorporated in the general South African and Australian CGT
regimes.
The article then focuses on the special rules in the South African tax legislation
that govern the calculation of CGT in respect of share value shifting and
considers some of the difficulties that arise from the fact that these measures
fail to interact properly with the general CGT provisions. In the second part of
the article, it considers which kinds of share value shifting are targeted by the
value shifting anti-avoidance measures in the South African tax legislation and
criticises the limited scope of these measures.
Belastingvermyding in die vorm van waardeverskuiwingsreëlings met betrekking tot aandele skep 'n bedreiging vir die integriteit van die Suid-Afrikaanse kapitaalwinsbelastingbedeling. As teenvoeter hiervoor bevat die Agtste Bylae tot die Inkomstebelastingwet, 58 van 1961 teenvermydingsbepalings wat daarop gemik is om hierdie vorm van belastingvermyding aan te spreek. Die artikel vergelyk hierdie bepalings met soortgelyke bepalings in die Australiese belastingwetgewing en identifiseer twee tekortkominge in die Suid-Afrikaanse bepalings: eerstens is die bepalings nie na wense met die res van die Agtste Bylae geïntegreer nie en tweedens is die omvang van die bepalings te beperk.
Belastingvermyding in die vorm van waardeverskuiwingsreëlings met betrekking tot aandele skep 'n bedreiging vir die integriteit van die Suid-Afrikaanse kapitaalwinsbelastingbedeling. As teenvoeter hiervoor bevat die Agtste Bylae tot die Inkomstebelastingwet, 58 van 1961 teenvermydingsbepalings wat daarop gemik is om hierdie vorm van belastingvermyding aan te spreek. Die artikel vergelyk hierdie bepalings met soortgelyke bepalings in die Australiese belastingwetgewing en identifiseer twee tekortkominge in die Suid-Afrikaanse bepalings: eerstens is die bepalings nie na wense met die res van die Agtste Bylae geïntegreer nie en tweedens is die omvang van die bepalings te beperk.
Description
CITATION: Jansen van Rensburg, E. 2007. Share value shifting : a comparison between the anti-avoidance provisions in South African and Australian tax legislation . Stellenbosch Law Review = Stellenbosch Regstydskrif 18(2):288-312.
The original publication is available at https://journals.co.za/content/journal/ju_slr
The original publication is available at https://journals.co.za/content/journal/ju_slr
Keywords
Stock transfer, Tax evasion -- Law and legislation -- South Africa, Tax evasion -- Law and legislation -- Australia, Capital gains tax -- South Africa, Share value shifting
Citation
Jansen van Rensburg, E. 2007. Share value shifting : a comparison between the anti-avoidance provisions in South African and Australian tax legislation . Stellenbosch Law Review = Stellenbosch Regstydskrif 18(2):288-312.