South Africa Tax Agency Posts Interpretation Note Clarifying Income Taxation of Sale, Leaseback Arrangements

The South African Revenue Service Oct. 22 posted online Interpretation Note No. 135, clarifying the taxation of certain sale and leaseback arrangements under Sections 23D and 23G of the Income Tax Act 58 of 1962. Topics covered include: 1) the application of anti-avoidance Section 23D, on limitation of allowances, when a taxpayer leases or licenses out a depreciable asset held within the two prior years by specified persons related to the lease or license; 2) the application of Section 23G, when receipts and accruals of a tax-exempt lessee or sublessee don’t constitute income; 3) when only the lessor’s receipts and ...