The Supreme Court of Appeal of South Africa issued a judgment in a case concerning application of section 24I of the Income Tax Act—that is, the income tax treatment of foreign exchange gains and losses realized from exchange items (as well as premiums or like consideration received or paid in respect of foreign currency option contracts and any consideration paid in respect of a foreign currency option contract acquired by certain persons).
The case is: Telkom SA SOC Ltd. v. Commissioner for the South African Revenue Service
The appellate court found that the lower court had correctly rejected the taxpayer’s contentions and upheld the tax assessment on the basis that the taxpayer “invoked the provision involving exchange rate gains and losses (section 24I …) in order to deduct a commercial loss which was completely unconnected to foreign exchange currency differences.”
Read a May 2020 report [PDF 133 KB] prepared by the KPMG member firm in South Africa
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