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Simulated transactions : the requirement of 'commercial substance' to determine simulation as enunciated in the NWK -case- the established substance over form doctrine renovated or a mere indivator of a concealed transaction?
Dissertation (LLM)--University of Pretoria, 2013.
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| Format: | Thesis |
| Language: | English |
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University of Pretoria
2014
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| _version_ | 1867613695702466560 |
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| access_status_str | Open Access |
| author2 | Louw, C (Adv.) |
| author_browse | Louw, C (Adv.) |
| author_facet | Louw, C (Adv.) |
| collection | Thesis |
| dc_rights_str_mv | © 2014 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. |
| description | Dissertation (LLM)--University of Pretoria, 2013. |
| format | Thesis |
| id | oai:repository.up.ac.za:2263/41514 |
| institution | University of Pretoria (South Africa) |
| language | English |
| last_indexed | 2026-06-10T12:40:14.504Z |
| license_str | Other — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UPSpace — University of Pretoria Institutional Repository |
| publishDate | 2014 |
| publishDateRange | 2014 |
| publishDateSort | 2014 |
| publisher | University of Pretoria |
| publisherStr | University of Pretoria |
| record_format | dspace |
| source_str | UPSpace — University of Pretoria Institutional Repository |
| spelling | oai:repository.up.ac.za:2263/41514 Simulated transactions : the requirement of 'commercial substance' to determine simulation as enunciated in the NWK -case- the established substance over form doctrine renovated or a mere indivator of a concealed transaction? Louw, C (Adv.) hugostruwig@gmail.com Struwig, Hugo Simulated transactions NWK 'Commercial substance' UCTD Dissertation (LLM)--University of Pretoria, 2013. It is a settled principle in our tax law that a court will not be deceived by the form of a transaction, but that effect will be given to the true substance thereof. This principle, embodied in the common law doctrine of substance over form, has been affirmed and applied by the judiciary for well over a century, especially in matters where taxpayers avoid the imposition of potential tax through simulating their transactions. If a court was satisfied that the parties subjectively intended to give effect to some other agreement between them, the court would only have regard to the actual rights and obligations created by the parties and impose tax on their real transactions in accordance with the provisions of a taxing statute. The law in respect of simulated transactions was clear. However, in Commissioner for the South African Revenue Service v NWK Ltd [2011 (2) SA 67 (SCA)] the court ostensibly introduced the requirement of commercial substance as a criterion to determine simulation. The requirement postulates that a transaction which lacks commercial substance will be regarded as simulated, irrespective of the parties’ genuine intention to give effect to the agreement between them. The requirement appears to overrule the entrenched test under the common law doctrine of substance over form and ostensibly established a new objective, independent common law criterion to determine simulation. The NWK requirement invariably ventures into the sphere of legitimate tax planning by virtue of its wide-ranging nature. Taxpayers need to understand the boundaries within which they may legitimately structure their affairs to reduce a potential tax burden as this advances the predictability of the law and respects the rule of law. NWK has, however, rendered the law on this subject rather uncertain and it is therefore crucial to establish the effect and applicability of the requirement to provide guidance to taxpayers on how to structure their affairs to legitimately avoid tax. The question, therefore, is whether the requirement is capable of independent application to determine simulation, or whether the requirement is only indicative of the presence of simulation in a transaction? If the latter, the common law position prior to the judgment will continue to prevail. In this dissertation, compelling arguments which illustrate the incapability of the requirement to function independently to determine simulation is researched, analysed and advanced. These arguments support the view that from a legal and logical point of view, the requirement cannot constitute an independent criterion to determine simulation. In the premise, it is submitted that the established common law doctrine of substance over form, as enunciated in Zandberg v Van Zyl [1910 AD 302], remains reflective of the law on simulated transactions and that the commercial substance requirement is only indicative of the presence of possible simulation in a transaction. am2014 Mercantile Law unrestricted 2014-08-21T12:49:08Z 2014-08-21T12:49:08Z 2014-04-09 2013 Mini Dissertation Struwig, H 2014, Simulated transactions : the requirement of 'commercial substance' to determine simulation as enunciated in the NWK -case- the established substance over form doctrine renovated or a mere indivator of a concealed transaction?, LLM dissertation, University of Pretoria, Pretoria, viewed yymmdd <http://hdl.handle.net/2263/41514> F/14/4/482 http://hdl.handle.net/2263/41514 en © 2014 University of Pretoria. All rights reserved. The copyright in this work vests in the University of Pretoria. No part of this work may be reproduced or transmitted in any form or by any means, without the prior written permission of the University of Pretoria. application/pdf University of Pretoria |
| spellingShingle | Simulated transactions NWK 'Commercial substance' UCTD Simulated transactions : the requirement of 'commercial substance' to determine simulation as enunciated in the NWK -case- the established substance over form doctrine renovated or a mere indivator of a concealed transaction? |
| title | Simulated transactions : the requirement of 'commercial substance' to determine simulation as enunciated in the NWK -case- the established substance over form doctrine renovated or a mere indivator of a concealed transaction? |
| title_full | Simulated transactions : the requirement of 'commercial substance' to determine simulation as enunciated in the NWK -case- the established substance over form doctrine renovated or a mere indivator of a concealed transaction? |
| title_fullStr | Simulated transactions : the requirement of 'commercial substance' to determine simulation as enunciated in the NWK -case- the established substance over form doctrine renovated or a mere indivator of a concealed transaction? |
| title_full_unstemmed | Simulated transactions : the requirement of 'commercial substance' to determine simulation as enunciated in the NWK -case- the established substance over form doctrine renovated or a mere indivator of a concealed transaction? |
| title_short | Simulated transactions : the requirement of 'commercial substance' to determine simulation as enunciated in the NWK -case- the established substance over form doctrine renovated or a mere indivator of a concealed transaction? |
| title_sort | simulated transactions the requirement of commercial substance to determine simulation as enunciated in the nwk case the established substance over form doctrine renovated or a mere indivator of a concealed transaction |
| topic | Simulated transactions NWK 'Commercial substance' UCTD |
| url | http://hdl.handle.net/2263/41514 |