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Cliffe Dekker Hofmeyr | South Africa | 29 Mar 2019

Deducting interest for debt incurred during acquisition of shares

It has always been a contentious issue whether a purchaser of shares can claim a deduction for the interest that it incurs on monies borrowed to acquire the shares. The legislature intervened by introducing Section 240 of the Income Tax Act, which allows purchasers to deduct interest for a debt that is used to fund the acquisition of shares in certain circumstances. However, the target must......
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Cliffe Dekker Hofmeyr | South Africa | 22 Mar 2019

Anomalies arising from value-shifting rules

The Taxation Laws Amendment Act introduced a new section into the Income Tax Act which deals with value mismatches involving the transfer of assets in exchange for the issue of shares. Essentially, the section applies where the value of the asset given in consideration for the shares issued is different from what it would have been had the transaction been between independent persons acting......
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Cliffe Dekker Hofmeyr | South Africa | 15 Mar 2019

New dawn for dividend-stripping rules?

Abusive schemes whereby taxpayers retain shares for at least 18 months before they are disposed of for a nominal consideration recently came to the attention of the National Treasury, which proposed that the share buy-backs and dividend stripping rules be amended with effect from 20 February 2019. The treasury provided no guidance on the nature of the amendments, but taxpayers should expect a......
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Wikborg Rein | Norway | 9 Jan 2019

Supreme Court clarifies distribution of interest component in global limitation fund

In a recent judgment in the Full City limitation fund proceedings, the Supreme Court clarified how a global limitation fund established pursuant to the Norwegian Maritime Code should be distributed. The court held that the interest component in the limitation fund should be distributed only on the claims for interest and not on the other claims filed in the fund because vessel owners'......
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Cliffe Dekker Hofmeyr | South Africa | 19 Oct 2018

Tax returns: when does prescription commence to run?

The Supreme Court of Appeal recently had to determine whether an assessment issued for secondary tax on companies (STC) in respect of a dividend cycle ending in February 2007, which had been levied under the Income Tax Act, had prescribed in accordance with the Tax Administration Act. The key issue for consideration was whether the Tax Administration Act had prohibited the South African......
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Cliffe Dekker Hofmeyr | South Africa | 12 Oct 2018

Crossing borders: the not-so-golden loop structure

In deciding whether to invest abroad and which country to invest in, taxpayers will usually consider whether South Africa has a double tax agreement with that country. However, taxpayers should also ensure that they comply with South Africa's exchange control rules when making an offshore investment. One of the biggest pitfalls to avoid in this regard is the creation of a loop structure,......
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Walder Wyss Ltd | Switzerland | 28 Sep 2018

Swiss Parliament approves corporate tax reform

The Swiss Parliament has approved the revised version of Tax Proposal 17, a proposal for corporate tax reform. The new proposal aims to set the basis for new rules on Swiss corporate tax (the last proposal having been rejected in a nationwide referendum) and secure and enhance Switzerland's overall attractiveness as a business location.
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Davis Polk & Wardwell LLP | United Kingdom | 26 Sep 2018

Private M&A trends: earn-outs

It is not always possible for a buyer to meet a seller's valuation, especially where the seller is seeking upfront value for expected rather than actual revenue or profit. In these circumstances, the buyer and seller may attempt to bridge the gap and agree the terms of an earn-out. Under a typical earn-out structure for a private M&A transaction, the buyer will make an initial payment of......
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Cliffe Dekker Hofmeyr | South Africa | 31 Aug 2018

Re-prioritising of sorts? Proposals on interaction between dividend stripping rules and corporate reorganisations

The Explanatory Memorandum on the Taxation Laws Amendment Bill notes that the 2017 amendments to the Income Tax Act which provided that the anti-avoidance rules on dividend stripping override the corporate reorganisation rules may affect some legitimate transactions. As such, a number of amendments have been proposed to remedy this issue.
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Schoenherr | Romania | 20 Aug 2018

Companies can now distribute dividends on a quarterly basis – but will they?

Until recently, Romanian companies could distribute dividends to shareholders only on an annual basis and on approval of their annual financial statements at the end of each financial year. This paradigm has changed and companies can now opt to distribute their dividends annually or quarterly. Although these newly acquired corporate rights have been widely welcomed within the Romanian......
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