Abstract
M.Com.
An assessed loss has certain requirements, which should first be met by the taxpayer prior to the set-off of an assessed loss or assessed loss balance. To ensure that there is no abuse of these particular provisions, there are further provisions on the use of an assessed loss, referred to as anti-avoidance provisions. This study focuses on the income tax treatment of an assessed loss, as tax/revenue collection is one of the key priorities of tax authorities. However, taxpayers seek to use any available tax benefit, e.g. an assessed loss, to their best advantage, within the set legislative boundaries of the Income Tax Act while remaining tax compliant. Thus, this study conducts a comparison of the income tax assessed loss treatment between South Africa and Israel with the intention of identifying differences, similarities, and any shortcomings that might exist. The main reason for the comparison of the two countries is the countries’ similar legislation/approach to the treatment of assessed loss/loss. The study also recommends areas for further research on South African tax legislation. The key requirement between the two countries is the trade requirement in respect of companies.