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Income Tax Act, 1962 (Act 58 of 1962)

Chapter III: General Provisions

Part II: Assessments

Part IIA

80B. Tax consequences of impermissible tax avoidance



(1)        The Commissioner may determine the tax consequences under this Act of any impermissible avoidance arrangement for any party by—

(a) disregarding, combining, or re-characterising any steps in or parts of the impermissible avoidance arrangement;
(b) disregarding any accommodating or tax-indifferent party or treating any accommodating or tax-indifferent party and any other party as one and the same person;
(c) deeming persons who are connected persons in relation to each other to be one and the same person for purposes of determining the tax treatment of any amount;
(d) reallocating any gross income, receipt or accrual of a capital nature, expenditure or rebate amongst the parties;
(e) re-characterising any gross income, receipt or accrual of a capital nature or expenditure; or
(f) treating the impermissible avoidance arrangement as if it had not been entered into or carried out, or in such other manner as in the circumstances of the case the Commissioner deems appropriate for the prevention or diminution of the relevant tax benefit.


(2) Subject to the time limits imposed by sections 99, 100 and 104(5)(b) of the Tax Administration Act, the Commissioner must make compensating adjustments that he or she is satisfied are necessary and appropriate to ensure the consistent treatment of all parties to the impermissible avoidance arrangement.