SARS-General3

associated enterprise is a ‘connected person’ – draft interpretation note for comment

14 October 2022

The draft Interpretation Note, “Definition of ‘Associated Enterprise’ ”, provides guidance on the interpretation and application of the definition of “associated enterprise” in section 31(1). The inclusion of an “associated enterprise” in section 31 comes into operation on 1 January 2023 and applies in respect of years of assessment commencing on or after that date.

What does this mean?

The application section 31 has an unintended consequence of not always capturing transactions between “associated enterprises” which may not fall within the “connected persons” definition. To correct this the term “associated enterprise” has been inserted into section 31(1) and into the definition of an affected transaction with effect from years of assessment commencing on or after 1 January 2023. This will result in “affected transactions” applying to both associated enterprises and connected persons in respect of years of assessment commencing on or after this date.

Comments can be emailed to policycomments@sars.gov.za.

You can read the draft Interpretation Note here.

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