Tax- Income Tax: Reportable Arrangements
South Africa's reportable arrangements legislation came into force in 2005 and provided for the reporting of two classes of arrangement. The first related to arrangements that resulted in a tax benefit and were subject to an agreement that provided for the variation of interest, fees, etc. if their actual tax benefits differed from the anticipated tax benefits. The second related to certain hybrid debt and equity instruments. The legislation was intended to give the South African Revenue Service (SARS) early warning of arrangements that were potentially tax driven. SARS would then be in a position to take appropriate action to counter abuse more quickly than would otherwise have been the case.
Following extended consultations with key commentators on the legislation, the new reportable arrangements legislation contained in section 80M to 80T of the Income Tax Act, 1962, was brought into force on 1 April 2008. SAIPA Your Law Volume 3 Issue 7 pages 20, 21 & 22 contain the new legislation arrangements which commenced on 01 April 2008.
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