Dividend cession – Investigating the South African tax implications
Journal of Economic and Financial Sciences
| Field | Value | |
| Title | Dividend cession – Investigating the South African tax implications | |
| Creator | Haupt, Estian Nel, Rudie | |
| Description | Orientation: The South African tax legislation in respect of dividend cession.Research purpose: The objective of this article was to investigate the tax implications of a dividend cession for the cedent, cessionary and declaring company involved in the cession in order to provide guidance regarding the tax implications arising from such cession.Motivation for the study: The introduction of specific anti-avoidance provisions and amendments to tax legislation complicated the tax treatment of a dividend cession. Current literature and guidance contains a brief reference to the capital gains tax implications, while other guides deal exclusively with the dividends tax implications. Based on the lack of definitive guidance of other taxes resulting from a dividend cession, this investigation is considered necessary.Research approach/design and method: This study involved an interpretative analysis of the tax legislation and incorporates other literature on the research objective to describe the tax implications as a result of dividend cession. The mode of inquiry for this study is qualitative in nature and follows a doctrinal research method.Main findings: Findings suggest that although the classification of a dividend cession could be a usufruct (a real right), the practical tax implications with reference to dividends could not have been the intention. The submission is therefore that the tax implications should be as a personal right. Furthermore, the introduction of specific anti-avoidance provisions resulted in an instance of possible double taxation which was noted, which is submitted as a possible unintended consequence as a result of legislation amendments.Practical/managerial implications: The practical value of the article lies in the guidance in respect of the tax implications which taxpayers could consider in transactions pertaining to dividend cession.Contribution/value-add: Instance of double taxation documented and submitted as possible unintended consequence which could inform further debate on the topic. | |
| Publisher | AOSIS | |
| Date | 2019-02-11 | |
| Identifier | 10.4102/jef.v12i1.153 | |
| Source | Journal of Economic and Financial Sciences; Vol 12, No 1 (2019); 10 pages 2312-2803 1995-7076 | |
| Language | eng | |
| Relation |
The following web links (URLs) may trigger a file download or direct you to an alternative webpage to gain access to a publication file format of the published article:
https://jefjournal.org.za/index.php/jef/article/view/153/560
https://jefjournal.org.za/index.php/jef/article/view/153/559
https://jefjournal.org.za/index.php/jef/article/view/153/561
https://jefjournal.org.za/index.php/jef/article/view/153/558
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