It is important to avoid an unfair detrimental impact on the rights of those whose transactions were legal at the time they were arranged.
THE draft Taxation Laws Amendment Bill 2012 contains various proposed legislative amendments to the Income Tax Act which, if enacted will have retrospective effect.
An example is section 8E of the Act, which was introduced primarily to counter tax avoidance involving preference-share financing arrangements and operates to deem certain dividends received by or accrued to the holder of such shares as interest in the hands of the holder only. The application of section 8E would generally result in the holder being subject to tax on the interest, while not being deductible in the hands of the issuer.
Originally published in PressDisplay.com on 10th September 2012.
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