Abstract
M.Comm.
Several foreign tax authorities make provision for special rules regarding the taxation of a group of companies. One example of such a provision is the cross-utilisation of losses between a group of companies. Currently in South Africa each entity in a group is taxed as a separate taxpayer and is accordingly not allowed to cross utilise losses. In the tough economic times companies find themselves in, the cross-utilisation of losses within a group may provide some relief to cash flow of companies. South African Tax Legislation contains various elements of group tax however, it is not recognised as a fully operational group tax system due to several elements not yet adopted by South Africa.
The purpose of this theoretical study is to understand, analyse and evaluate the basic provisions of the group relief model implemented by the United Kingdom and the consolidated group relief model implemented by Australia. The outcome of these studies was analysed to determine the most appropriate group tax model from a South African perspective.