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South African companies have, in the past, not recognised an asset for unused Secondary Tax on Companies (“STC”) credits. AC 501, Accounting for “Secondary Tax on Companies (STC)”, which is effective for annual periods beginning on or after 1 January 2004, now requires South African companies to recognise a deferred tax asset for unused STC credits, to the extent that it is probable that an entity will declare dividends of its own, against which the unused STC credits can be utilised. In terms of AC 501 and IAS 12 (AC 102), Income Taxes (the local and international accounting standard on income taxes), the recognition of a liability to pay STC has to be postponed until the declaration of a dividend. Some accounting commentators have indicated that they find it anomalous to recognise a deferred tax asset in respect of unused STC credits, while no liability is recognised for the STC that would be payable on the future distribution of retained earnings. The objective of the study is to consider whether it is conceptually anomalous to recognise a deferred tax asset for unused STC credits while no liability is raised for the STC that would become payable on future dividend declarations on profits already recognised in the financial statements. The study concludes that it is conceptually anomalous to recognise a deferred tax asset for unused STC credits when no corresponding liability is raised.

In his 2006 State of the Nation Address, President Thabo Mbeki indicated that the regulatory environment for small businesses would be improved, as this sector plays an important role in the national strategy for accelerated and shared growth. The aim of this study is to determine whether the size of an enterprise and the sector in which the enterprise operates has an impact on how the enterprise’s tax responsibilities are administered and managed. A survey was conducted amongst small and medium enterprises in the manufacturing, retail and business services sectors in Gauteng. The study focused on Gauteng because the majority of small, medium and microenterprises (SMMEs) are located in this province. The study found that most small and medium enterprises (SMEs) in the business services sector outsource their tax responsibilities because they lack the time needed to manage these functions. It was also found that the size and type of organisation affects the role taxation inputs play in business decisions. The SMEs included in the survey preferred a reduction in interest and penalties charged as a taxation relief measure.

In his 2006 State of the Nation Address, President Thabo Mbeki indicated that the regulatory environment for small businesses would be improved, as this sector plays an important role in the national strategy for accelerated and shared growth. The aim of this study is to determine whether the size of an enterprise and the sector in which the enterprise operates has an impact on how the enterprise’s tax responsibilities are administered and managed. A survey was conducted amongst small and medium enterprises in the manufacturing, retail and business services sectors in Gauteng. The study focused on Gauteng because the majority of small, medium and microenterprises (SMMEs) are located in this province. The study found that most small and medium enterprises (SMEs) in the business services sector outsource their tax responsibilities because they lack the time needed to manage these functions. It was also found that the size and type of organisation affects the role taxation inputs play in business decisions. The SMEs included in the survey preferred a reduction in interest and penalties charged as a taxation relief measure.

A debt defeasance arrangement is an arrangement whereby a debtor’s obligation to pay a creditor is nullified. The debtor and other parties perform a variety of legal and other actions in order to effect a valid debt defeasance arrangement. One of the actions that should be taken by the debtor is to pay an amount to a third party who takes over the obligation to pay the debt. The money received by the third party is referred to as a debt defeasance receipt. Debt defeasance arrangements are used in countries such as the United States of America and Australia. The financial community in South Africa is becoming increasingly interested in the debt defeasance arrangement. As South Africa is becoming part of the global community, more foreign companies are doing business in South Africa. Because it is a relatively unfamiliar arrangement, that has not yet been addressed by the South African taxation authorities, there are probably a number of unanswered tax questions regarding the arrangement. One issue that is not yet clear is what the source of a debt defeasance receipt would be if it were to be received by a non‐resident in South Africa. A survey was done among South African banks, auditing firms and taxation senior counsel to determine the majority opinion of South African respondents regarding the source of a debt defeasance receipt. Although a variety of alternatives are identified as possible sources, the majority view is that the source is the debt defeasance business activities that are conducted by the recipient. It therefore follows that if the recipient of a debt defeasance receipt conducted his or her debt defeasance business activities in South Africa, the receipt will be of a South African source.

The purpose of this study was to determine the requirements and guidelines for the disclosure of taxation information in the financial reports of South African companies in order to determine the extent to which leading South African companies comply with these requirements and guidelines. It was determined that there are comprehensive requirements and guidelines in respect of the disclosure of taxation information in the financial reports of South African companies. These requirements and guidelines are regulated by the Companies Act, No. 61 of 1973, as well as the statements of Generally Accepted Accounting Practice that are issued by the South African Institute of Chartered Accountants. The analyses undertaken of the financial statements of the selected companies indicate that leading companies in South Africa comply to a large extent with the requirements and guidelines for the disclosure of taxation information in financial reports.

According to AC 501, Accounting for ‘Secondary Tax on Companies (STC)’, a deferred tax asset for unused STC credits is recognised if it is probable that an entity will declare dividends against which unused STC credits can be used. This study examined the dividend declaration profile of companies recognising a deferred tax asset for unused STC credits to satisfy AC 501. In a literature review, the term ‘probable’ was analysed, showing that future dividend declarations are only regarded as ‘probable’ if their likelihood is 64% to 79%. A survey revealed that 45% of the surveyed companies with unused STC credits recognised a deferred tax asset for unused STC credits in their 2004 financial statements, and therefore believed they had satisfied the probability recognition criterion in AC 501. The survey also showed that companies that recognised a deferred tax asset have a dividend policy shareholders are familiar with, and most declare dividends annually. These two indicators can help assess the probability of future dividend declarations.

The Bitcoin has experienced wide popularity in academic and commercial spheres during the years following 2012. Research has been conducted in respect of information technology, finance and reporting paradigms, but there has been little research into the taxation of the Bitcoin. The purpose of this paper is to present a conceptual approach for developing a taxation policy for the Bitcoin, using a multi-jurisdictional analysis.

An interpretive mixed-method approach is followed. The traits of the Bitcoin are determined through a review of the literature, followed by the determination of key taxation themes using a multi-jurisdictional view where the jurisdictions were determined using the largest Bitcoin exchanges. These form the row and column headings of the correspondence table research instrument, respectively. The correspondence table was completed by 40 tax experts. Correspondence analysis (a multivariate statistical technique) was then used to determine correlations between the Bitcoin traits and taxation themes, further used to present initial insights into developing a taxation policy for the Bitcoin.

The correspondence analysis reveals that, contrary to current tax laws, the manner of acquisition as opposed to the reason (intention) for acquisition is key in determining how the Bitcoin is to be taxed. For taxing purposes, Bitcoin is seen as being distinct from currency, given that transactions with the Bitcoin are seen as barter transactions. Finally, because of the unique characteristics of the Bitcoin, it is shown that exchanges and the Bitcoin need to be regulated in the same manner as a currency.

This research focuses on income tax including capital gains tax and consumption taxes and was conducted with a sample of purposefully selected South African tax experts, given that the Bitcoin is experiencing enhanced popularity in South Africa. As a result, this research does not provide generalisable positivist conclusions and does not purport to represent the views of all tax practitioners. This paper does, however, provide an initial mechanism to develop taxation treatments for transactions not covered by existing legislation.

This paper is the first to provide normative recommendations on the taxation of the Bitcoin. Using correspondence analysis, this paper offers an innovative approach for developing taxation policies when a transaction is not specifically included in the extant legislation. Further value is added through the use of a third dimension in the correspondence analysis which enhances the exploratory potential of the research.

This paper examines the corporate income tax compliance costs and their determinants by analyzing survey and financial statements data from firms operating in Greece. We find that corporate tax compliance costs are of considerable size and vary with several firm-specific characteristics, including the firm’s size, its age, the sector in which it operates, its location, and its legal form. The paper intends to raise awareness regarding the impact of tax compliance costs, especially for countries, such as Greece, that were significantly affected by the economic and financial crisis.

To examine the business case for corporate social responsibility (CSR) in the South African context.

A cross-sectional correlation research design involving quantitative and qualitative data.

The findings lend general support for the utility of business case oriented CSR strategic applications in the South African business context.

The small samples using accountancy students and high CSR performing companies restricted the generalizability of the findings. Also, the links between respondents’ propensity to purchase and actual purchasing behavior remained undetermined.

The chapter provides an empirically validated model measuring associations between individual perceptions of actual and expected CSP configurations with predilections to purchase products from a sample of high profile CSR multinational South African companies.

The results suggest the model’s cogency and lend general support to the utility of the business case strategy in the South African business context by showing associations between CSR company profiles and respondents’ intentions to purchase their goods and services.

The importance of CSR in providing social benefits in South African communities is reinforced by its strategic importance in offering business benefits to companies that invest in its implementation.

Development and empirical verification of a novel conceptual model in the South African business context.

Controlled foreign company (“CFC”) legislation, governed by section 9D of the Income Tax Act 58 of 1962, serves as anti‐avoidance legislation in South Africa’s residence‐based tax system. Section 9D provides for the calculation of a deemed amount which must be included in the South African resident’s income. This deemed amount is calculated with reference to the net income for the CFC’s foreign tax year. Section 9D(6) provides for this deemed amount, which is denominated in the foreign financial reporting currency, to be translated into South African rand by applying the average exchange rate for that year of assessment. The legislation refers to the South African resident’s year of assessment and not the CFC’s foreign tax year. It is submitted that the average exchange rate for the CFC’s foreign tax year should be used for translation. The author therefore disputes the period to be used in calculating the average exchange rate.