Modernising the 'substance over form' doctrine : Commissioner for the South African Revenue Service v NWK Ltd

Abstract

Taxpayers are entitled to arrange their affairs so as to remain outside the provisions of taxing statutes. However, an attempt that harbours dishonesty can always be challenged by the tax authorities, and the courts will not be deceived by the form of such a transaction. They can examine the true nature of the transaction and attach adequate tax implications to it (WT Ramsay Ltd v Inland Revenue Commissioners [1982] AC 300; 11 ATR 752; Dadoo Ltd v Krugersdorp Municipal Council 1920 AD 530; Commissioner of Inland Revenue v Saner 1927 TPD 162; Commissioner of Customs and Excise v Randles, Brothers & Hudson Ltd 1941 AD 369; Secretary for Inland Revenue v Hartzenberg 1966 (1) SA 405 (A)). This is the essence of the doctrine of substance over form ('the doctrine').