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Tax & Legal

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    Tax & Legal

      Real estate transfer tax on share transfers unconstitutional


      The Constitutional Court has held the set calculation of the value of the land held by a company when assessing the transfer of the company’s shares to real estate transfer tax to be unconstitutional. The government has been given until June 30, 2016 to enact a different formula, to be applied retroactively to January 1, 2009.

      Subordinated debt not a liability whilst debtor’s liabilities exceed assets


      The Supreme Tax Court has followed its previous case law in holding that a company financed by subordinated shareholder loans may not take up a liability until the conditions for repayment are met. However, the subordination is a shareholder’s capital contribution to be taken to capital reserve rather than income to the extent the debt had value as an asset at the time.