Page 69 - P6 Slide Taxation - Lecture Day 4
P. 69

REMEMBER:



 • There are exchange items and underlying items in each transaction.


 • Identify each item separately and treat it separately for tax purposes.






                                                             EXAMPLE

          Co A purchases trading stock from an American supplier @ $100 000.

       To protect the company against foreign currency exchange fluctuations,

                              Co A took out a hedging item (FEC or FCOC).






                                                                    Items?




                    Exchange items
                                                                                                  Underlying item







                 Debt                FEC/FCOC                                                         Trading stock



                                                                                                                                  s 11(a)



                 s 24I                        s 24I                                                       s 25D
                                                                 Conversion to Rand?                                                s 22
   64   65   66   67   68   69   70   71   72   73   74