Section 31 of the South African Income Tax Act and its proposed changes to the transfer pricing rules have created much discussion among finance directors, tax managers and tax advisors.
The changes tabled in Section 56 of the 2010 Taxation Laws Amendment Act will permit the Commissioner to adjust the terms and conditions of a transaction, not just the price, if he is of the view that these terms and conditions are not in accordance with the arm’s length principle. This may lead to further uncertainty and compliance costs for taxpayers.
