n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - The challenges that e-commerce poses to international tax laws : 'controlled foreign company legislation' from a South African perspective (part 2)

Volume 20, Issue 4
  • ISSN : 1015-0099
  • E-ISSN: 1996-2185



In terms of s 9D(12) of the Income Tax Act, a South African shareholder who together with connected persons holds 10 per cent to 25 per cent of the participation rights or voting rights in a CFC can elect to treat all his pro rata share of CFC income as taxable under s 9D even if he would have been granted an exemption under s 9D(9).

Section 9D(13) provides that any resident who, together with connected persons, holds 10 per cent up to 25 per cent of the participation rights or voting rights of a foreign company may elect that this foreign company be deemed to be a CFC in relation to him for any of its foreign tax years.

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