Disallowing the utilisation of an assessed loss: a survey of South African case law
Date
2023-01-26
Authors
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Journal ISSN
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Publisher
University of the Witwatersrand, Johannesburg
Abstract
The purpose of this report is to examine the circumstances in which the utilisation of an assessed tax loss can be disallowed. This research evaluates the provisions of section 20 of the Income Tax Act 58 of 1962 to the effect that the set-off of any balance of assessed loss incurred by a taxpayer (such as a company) in any previous year of assessment is admissible only against income derived by the taxpayer from carrying on a trade. The report focuses on how companies should have regard to the general legal principles laid down in the case law in considering whether they have satisfied the “carrying on [of] a trade” requirement in order to carry forward an assessed loss. The research suggests that taxpayers should also be aware that the South African Revenue Service (“SARS”) may nevertheless invoke the provisions of section 103(2) of the Act to disallow the utilisation of an assessed loss
Description
A research report submitted to the Faculty of Commerce, Law and Management in partial fulfilment of the requirements for the degree of Master of Commerce (Taxation), University of the Witwatersrand, Johannesburg, 2023
Keywords
Assessed tax loss, Utilisation, Disallowed, Section 20, Carrying on a trade, Commercial justification, Solely or mainly, Carry forward an assessed loss, UCTD
Citation
Schreuder, Sharolta . (2023). Disallowing the utilisation of an assessed loss: a survey of South African case law [Master’s dissertation, University of the Witwatersrand, Johannesburg]. WireDSpace.