n Tydskrif vir die Suid-Afrikaanse Reg - Taxability of interest-free loans : a storm in a teacup : case discussion




It is submitted that the recent decision by the supreme court of appeal on interest-free loans is a storm in a teacup. According to media reports, however, the case had "turned tax law on its head" (Ernst & Young (Sep 2007)). These reports have sent shock waves throughout the tax community. A careful reading of the case in question, however, soon indicates that the media reports are wrong, and that the ruling does not imply that all interest-free loans fall within the gross-income definition in the Income Tax Act 58 of 1962 (the act). The decision does, nonetheless, raise several related questions.


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