n Stellenbosch Law Review = Stellenbosch Regstydskrif - Die toevallingsbeginsel in belastingreg in die konteks van die

Volume 16, Issue 2
  • ISSN : 1016-4359
  • E-ISSN: 1996-2193



The undisclosed principal-situation has been accepted as part of our law and applied in a variety of circumstances. The phenomenon has often been described as anomalous and not reconcilable with our Roman Dutch roots. The application of the accrual principle in the context of the undisclosed principal-situation has until now not yet been tested by our courts. Based on the underlying legal construction of the undisclosed principal-situation, it is likely that there will be an accrual of benefits for the agent upon the entering into an agreement in his own name for the benefit of the principal. This situation, although inequitable, is likely to result in the taxation of a person even though he is not necessarily receiving the economic benefit of the transaction in question. Although the agent may qualify for a section 11(a) deduction in respect of his or her obligation towards the principal, this will not always be the case especially where the agent executes his or her duties for no consideration. This commercially illogical result serves to confirm further the anomalous nature of the undisclosed principal and (like so many other factors) questions the acceptance thereof in our law.

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