21 February 2019 by Special Edition Budget Speech Alert 2019

Expansion of reportable arrangements?

Currently taxpayers are obliged to report certain transactions which may be seen to be abusive in certain circumstances.

There are, for instance, the following:

  • a company buys back shares from one or more shareholders for an aggregate amount exceeding R10 million and new shares are issued by the company within 12 months;
  • the acquisition of shares in a company with an assessed loss exceeding R50 million;
  • arrangements pertaining to consultancy and related services between a resident and a non-resident to the extent that the expenditure is anticipated to exceed R10 million.

However, there are still a number of offshore structures that do not need to be reported. This especially relates to the creation of foreign trusts in circumstances where the argument is that the control of the foreign trust does not vest in a South African resident. It has been announced that mandatory disclosure rules will be introduced to identify these type of structures and that they also need to be reported. Penalties will be imposed to the extent that these arrangements are not reported.

download PDF

The information and material published on this website is provided for general purposes only and does not constitute legal advice.

We make every effort to ensure that the content is updated regularly and to offer the most current and accurate information. Please consult one of our lawyers on any specific legal problem or matter.

We accept no responsibility for any loss or damage, whether direct or consequential, which may arise from reliance on the information contained in these pages.

Please refer to the full terms and conditions on the website.

Copyright © 2017 Cliffe Dekker Hofmeyr. All rights reserved. For permission to reproduce an article or publication, please contact us cliffedekkerhofmeyr@cdhlegal.com

You may also be interested in