ASSIGNMENT ML SIBIYA 201841625 1. Residents are taxed on their world-wide income In order to tax scooter Ltd on the worldwide income, it must be considered if scooter Ltd is an ordinal resident in South Africa or not a resident. A person other than a natural person or a company are determine as resident if: If it's incorporated, established or formed in SA, Has it place of effective management in SA or Has it place of effective management in the Republic of South Africa. Th terms "incorporated", "established" or"formed" have no definition in the Income Tax Act. A person(other than a natural person) which has it place of management in SA,is a resident irrespective of where it is incorporated. Although Scooter Ltd was incorporated in Republic of Ireland, its place of management is in Republic of SA, activities and promotion work including day to day management decisions are made in Capetown. Therefore the Scooter Ltd is a South African resident. Ordinal resident First step in determining whether scooter Ltd is an ordinal resident is South Africa or not. Ordinal resident is not defined by the tax act therefore they case laws will interpret it Cohen case state that: a taxpayer is ordinal resident to a country if she or he would return to from his wanderings Kuttel Case state that: a taxpayer is ordinal resident to a county if she or he consider it a real home
Scooter Ltd is incorporated in republic of Ireland therefore a resident as define by the case of law to the republic of Ireland Management still meet in Ireland on a regular basis and all matters pertaining to Scooters' overall strategy and direction are taken in Ireland. Since the business move in South Africa on 2015 it also consider as a resident in South Africa because . The day-to-day management decisions are made at the Cape Town head office. . As a result of the move of the head office to Cape Town, 2. A Natural person can be a resident if he or she meet the ordinary resident and the PPT Ordinary resident In order to tax Ayanda Ntuli on the worldwide income, it must be considered if Ayanda Ntuli is an ordinal resident in South Africa or not a resident. Kuttel Case state that: a taxpayer is ordinal resident to a county if she or he consider it a real home and must be habitually and naturally resident. Cohen case, it was established that taxpayer is ordinarily resident in Ireland as that is the place to which he would return to from his wandering As his wife and family still live at the republic of Ireland, Ireland is considered as Ayanda real home Ayanda Ntuli only came to SA to move the company operations as he saw opportunity to benefit from week South Africa exchange rate. Therefore Ayanda Ntuli is not a ordinary resident in South Africa as he will return to Ireland after his wandering where his family lives. Physical Presence