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Uncertificated Securities Tax Act, 1998 (Act No. 31 of 1998)

11A. Schemes for obtaining undue tax benefits

 

(1) Notwithstanding anything in this Act, whenever the Commissioner is satisfied that any transaction, operation, scheme or understanding (whether enforceable or not), including all steps by which it is carried into effect—
(a) has been entered into or carried out which has the effect of any person obtaining a tax benefit;
(b) having regard to the substance of the transaction, operation, scheme or understanding—
(i) was entered into or carried out in a manner which would not normally be employed for bona fide business purposes other than the obtaining of a tax benefit; or
(ii) has created rights or obligations which would not normally be created between persons dealing at arm’s length; and
(c) was entered into or carried out solely or mainly for the purposes of obtaining a tax benefit,

the Commissioner shall determine the liability for any tax imposed by this Act and the amount thereof, as if the transaction, operation, scheme or understanding had not been entered into or carried out, or in such manner as in the circumstances of the case the Commissioner deems appropriate for the prevention or diminution of such tax benefit.

 

(2) For the purpose of this section ‘tax benefit’ means—
(a) any reduction in the liability of any person to pay tax;
(b) any increase in the entitlement of any person to the refund of tax; or
(c) any other avoidance or postponement of liability for the payment of any tax imposed by this Act or any tax, duty or levy imposed by any other Act administered by the Commissioner.

 

(3) Any decision of the Commissioner under subsection (1) shall be subject to objection and appeal, and whenever in proceedings relating thereto it is proved that the relevant transaction, operation, scheme or understanding results or would result in a tax benefit, it shall be presumed, until the contrary is proved, that such scheme was entered into or carried out solely or mainly for the purpose of obtaining a tax benefit.