South Africa hits avoidance

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News reports suggest that South Africa will publish its long awaited new anti-avoidance legislation next week.

This is good news. The legislation should be a full blown general anti-avoidance principle. Reports suggest that:

Transactions will need to have intrinsic "commercial substance" to pass muster with SARS and must be aligned with the spirit of the legislation or have "statutory purpose".

If South Africa can get the wording of this right it's another great story from there this week - because they'll then be blazing a path for others to follow, including, one hopes those who are seeking to create the objective tests on controlled foreign companies that are needed in the wake of the Cadbury Schweppes decision.