The SAIT International Tax Technical Work Group highlights a misalignment between current group rollover relief provisions in the Income Tax Act and the economic reality of loop structures, where South African residents hold interests in offshore entities that own local assets. Although intended to facilitate tax-neutral intra-group restructurings, the narrow definition of a “group of companies” under section 41 excludes these structures, leading to unintended tax inefficiencies. The submission proposes amending the legislation to broaden this definition, align with recent exchange control relaxations, and issue clear guidelines to ensure equitable tax treatment and better support corporate reorganisations without eroding the South African tax base.
