Abstract
M.Com. (Taxation)
This study has been undertaken to clarify the meaning of "dividend" with reference to the definition of dividend in the Income Tax Act. The study has been conducted as follows:-
(1) The meaning of "dividend" as described in general mercantile and accounting terms has been investigated and a description of the term has been composed.
(if) As a dividend entails the distribution of profits, the terms "profit" and "profit available for distribution" have also been addressed. Thereafter an in depth investigation was undertaken of the definition of a "dividend" 1n the Income Tax Act, and compared with the general meaning of the term "dividend, II Finally, the income tax payable on dividends received is discussed. A conclusion is reached that the definition of a dividend in the Income Tax Act has a much wider meaning than is understood by the term in the business world. Further more the Act ignores the general Accounting connotation to the term "dividend" Lastly, it is clear that no neutrality exists concerning the taxability of dividends in the hands of the various taxpayers that we find in the
South African tax system.