A comparison of the tax legislation of the of trusts between South Africa and Israel

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University of Pretoria

Abstract

Trusts are used on a worldwide basis in various financial structures. The residents of both South Africa and Israel also use trusts extensively. The taxation of trusts has developed over the years in South Africa, but the Israeli government only addressed specific tax legislation pertaining to trusts with effect from 2006. No information could be found indicating that any comparative study has been made between these two countries regarding their tax legislation pertaining to trusts. The aim of this study is to do a comparison of the tax legislation pertaining to trusts by these two countries with a view to identify similarities and differences. The study found that the tax legislation pertaining to trusts of the two countries are very similar. An important difference identified, however, was the fact that the Israeli tax legislation contains some incentives for former Israeli residents returning to Israel and foreigners who become Israeli residents. In terms of these incentives exemption from taxation is enjoyed for periods of five and ten years. This affords the entrants the opportunity to settle properly before they become fully taxable as Israeli residents.
Trusts word wêreldwyd gebruik in finansiële strukture. Die inwoners van Suid Afrika en Israel gebruik trusts ook baie algemeen. Alhoewel die belasting van trusts in Suid Afrika oor verloop van tyd ontwikkel het, het die owerhede van Israel eers sedert 2006 spesifiek die belasting van trusts in die belastingwetgewing aangespreek. Geen inligting kon verkry word oor enige vergelykende studie tussen die belastingwetgewing van die twee lande wat handel oor trusts nie. Hierdie studie het ten doel om ‘n vergelyking te tref van die belastingwetgewing van trusts tussen die twee lande met die oog daarop om ooreenstemmings en verskille te identifiseer. Die studie het bevind dat die twee lande se wetgewing grootliks ooreenstem. ‘n Belangrike verskil wat geïdentifiseer is, is die feit dat Israel se belastingwetgewing sekere aansporings bevat waardeur Israelis wat terugkeer na Israel en buitelanders wat inwoners van Israel word vir periodes van vyf en tien jaar nie in Israel op sekere inkomste belas word nie. Op daardie wyse word die nuwelinge kans gegee om hulself behoorlik in te burger voordat hulle ten volle belasbaar word as inwoners van Israel.

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Mini-dissertation (MCom)--University of Pretoria, 2012.

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UCTD

Sustainable Development Goals

Citation

Terhoeven, C 2012, A comparison of the tax legislation of the of trusts between South Africa and Israel, MCom dissertation, University of Pretoria, Pretoria, viewed yymmdd < http://hdl.handle.net/2263/30708 >