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Potchefstroom Electronic Law Journal/Potchefstroomse Elektroniese Regsblad

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Some Drastic Measures to Close a Loophole: The Case of Pienaar Brothers (PTY) LTD v Commissioner for the South African Revenue Services(87760/2014) [2017] ZAGPPHC 231 (29 May 2017) and the Targeted Retroactive Amendment of Section 44......

Liezel Tredoux, SP van Zyl

Abstract


Full Title: Some Drastic Measures to Close a Loophole: <i>The Case of Pienaar Brothers (PTY) LTD v Commissioner for the SARS</i>(87760/2014) [2017] ZAGPPHC 231 (29 May 2017) and the Targeted Retroactive Amendment of Section 44 of the Income Tax

 

A taxpayer has the right to arrange his tax affairs within the constraints of the law to his best advantage to pay the least amount of tax. Coupled with this right is the taxpayer's right to certainty, which entails that the time of payment of taxes, the manner of payment, and the amount of payment must be clear and plain to the taxpayer and to any other person. Accordingly, a taxpayer must have peace of mind that revenue laws will not be amended arbitrarily, retrospectively, and with the effect that the taxpayer's position is affected negatively. The South African tax legislation allows the deferral of tax liability when amalgamation transactions, asset for share transactions, and mergers and acquisitions are embarked upon by a taxpayer. This article analyses the judgment in Pienaar v Commissioner: South African Revenue Services (87760/2014) [2017] ZAGPPHC 231 (29 May 2017) critically with specific reference to amalgamation transactions, the taxpayer's right to tax certainty, and the application of retroactive amendments to completed transactions.

Keywords: Retroactive amendments; secondary taxes on companies; roll-over relief; tax avoidance; share premium; share capital; contributed tax capital.




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