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
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.