n Without Prejudice - Clearly wrong : tax




For many years there has been a debate as to whether a company can incur a cost in relation to the acquisition of an asset or by incurring operating expenditure, where it pays the supplier by issuing its own shares. The SA Revenue Service (SARS) had strenuously taken the view that this was not possible because the company parted with nothing when it issued its shares. The burden fell on the remaining shareholders, whose interest in the company was diluted, but not on the company itself.


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