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TAX2601 Assignment 1 Semester 1 2023
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TAX2601 Assignment 1 Semester 1 2023 TAX2601 Assignment 1 Semester 1 2023 TAX2601 Assignment 1 Semester 1 2023
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TAX2601 Assignment1 Semester 1 2023
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, Reference: Study Guide 1 PG 12
Dividends received by individuals from South African companies are generally exempt
from income tax, but dividends tax at a rate of 20% is withheld by the entities paying the
dividends to the individuals.
Income tax, among others includes
capital gains tax
turnover tax
dividends tax
2. 4
Reference: Study Guide 1 PG 27
When a provision is introduced to the Income Tax Act for the first time, it is usually
discussed in an explanatory memorandum. This explanation will generally give the
intention for introducing the provision, which, in turn, will indicate the intention of the
legislator. The purpose behind the words must after all be determined.
Apply the contra fiscum rule. According to this rule, where a provision of the Income Tax
Act has two interpretations, the court will interpret the provision in terms of the interpre-
tation that places the smaller burden on the taxpayer.
3. 2
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, Reference: Study Guide PG 17
4. 4
Reference: Study Guide PG 18
The taxation rules (commonly referred to as provisions) contained in the Income Tax Act
are not always clear and straightforward. In practice, this often results in different
interpretations by SARS, taxpayers, accountants and the public. Because of these
differences of opinion and grey areas in the Act, the courts are often called upon to
determine what the real intention of the legislature was when the provisions were
enacted.
SARS, as the administrator of the Income Tax Act, also issues binding general rulings,
interpretation notes and practice notes on certain of these taxation rules in order to
provide taxpayers with clarity and guidance. The need for interpretation will only arise
when a provision in the Income Tax Act is not clear.
5. 3
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