The taxation of foreign investment income

Abstract

This article analyses the principles for determining the source of income in South Africa for tax purposes. The fact that South Africa is increasingly becoming part of the international community, has resulted in changes in the economic environment. This means that current legislation is inadequate to prevent the erosion of the South African tax bases. The South African Revenue Services therefore introduced new legislation to prevent this loss of income. In this article the legislation is examined and illustrated in a practical situation and problems with the application of the various sections are identified.