7.
Annexures
Annexure A – Standard conditions and assumptions
Basis of the ruling(s) given in this letter
This ruling letter and the ruling(s) set forth herein are based upon the following:
1. The information, documents, representations, facts considered and assumptions
presented being true and accurate;
2. Any legal agreements or contracts entered into (or proposed to be entered into) in connection with the proposed transaction being legally valid and enforceable in
accordance with their stated terms, the parties to those agreements timeously
satisfying their obligations under those agreements, and those agreements
otherwise being carried out in accordance with their terms; and
3. The interpretation and application of tax laws, regulations, binding general rulings, and case law in effect as of the date of this binding private ruling.
The ruling(s) set forth in this ruling letter only apply to the provisions of the tax laws identified in this binding private ruling in connection with the proposed transaction described herein.
The understanding of the South African Revenue Service (SARS) of the proposed
transaction
This ruling letter and the ruling(s) set forth herein are based upon the understanding of SARS of the proposed transaction as described herein.
Please note that if you believe that this understanding is incorrect, inaccurate or incomplete, it is your obligation to notify SARS immediately. The failure to rectify a misunderstanding of a material fact may result in the ruling being withdrawn or modified.
Subsequent changes in the tax laws
This binding private ruling letter will cease to be effective in any of the following
circumstances:
1. The provisions of the tax laws that are the subject of this binding private ruling are repealed or amended; or
2. A court overturns or modifies an interpretation of the provisions of the tax laws on which the rulings set forth herein are based unless–
the decision is on appeal;
 the decision is fact-specific and the general interpretation upon which the
rulings were based is unaffected; or
 the references in the decision to the interpretation upon which the rulings were
based are obiter dicta.
In any of these circumstances, the ruling letter will cease to be effective immediately upon –
1. the effective date of the repeal or amendment of the provisions in question, or
2. the date of the reasons for judgment.
SARS is not obliged to notify the applicant, or any co-applicant(s) if applicable, or to otherwise publish a notice of withdrawal or modification.
Fraud, misrepresentation or non-disclosure
1. This binding private ruling letter is void ab initio in any of the following circumstances:
 The proposed transaction is materially different from the transaction actually
carried out;
 There is fraud, misrepresentation or a non-disclosure of a material fact; or
 Any condition or assumption prescribed in this binding private ruling is not
satisfied or carried out.
2. A fact is considered material if it would have resulted in a different ruling had SARS been aware of it when issuing this binding private ruling letter.
Other requirements and limitations
This ruling letter and the ruling(s) set forth herein are also subject to any other requirements and limitations set forth in Chapter 7 of the TA Act, as well as any requirements and limitations set forth in any general binding ruling issued under section 90 of the TA Act.
This ruling letter and the specific ruling(s) set forth in it only apply to the applicant and any co-applicant(s) identified herein. This ruling letter may not be cited in any proceeding, including court proceedings, other than a proceeding involving the applicant or any co-applicant(s) identified herein.

Annexure E – Example of a binding ruling application
The South African Revenue Service
281 Middle Street
Nieuw Muckleneuk
Brooklyn
Pretoria
Dear Sir
Applicant – ATR reference number – xxxx
Binding ruling application relating to tax treatment of the (for example) proceeds from the
disposal of shares
1. Introduction
1.1 Ruling request
On behalf of the applicant we hereby request a (for example) binding private ruling relating to the tax treatment of (for example) certain proceeds to be received by the applicant from the disposal of shares in a company to be formed (‘NewCo’).
NOTE: This paragraph should summarise the ruling request.
1.2 Sections of the Act referred to in the application
The relevant provisions of the Income Tax Act No. 58 of 1962 (‘the Act’) referred to in this application are:
 The definition of the term ‘gross income’ in section 1(1)
 Paragraph 2(1) of the Eighth Schedule to the Act
1.3 Documents
Please find attached the following supporting documentation:
 Annexure A – Disclosure of required information. This annexure sets out the
information required to be submitted in accordance with section 79 of the Tax
Administration Act (TA Act).
 Annexure B – A letter in terms of section 87(1) of the TA Act whereby the applicants consent to the publication of the ruling by SARS.
 Annexure C – The proposed draft ruling.
2. Factual background
2.1 Background
This section should provide a complete description of the proposed transaction in respect of which the ruling is sought (section 79(4)(c) of the TA Act). This should include as much information as possible about the applicant and the transaction to ensure SARS’s understanding of the proposed transaction.
2.2 Detailed description of the transaction
This section should set out the transaction step-by-step.
3. Relevant provisions of the Act
Statement of the relevant statutory provisions or issues (section 79(4)(g) of the TA Act). This section should set out a statement providing the interpretation of the relevant statute to the proposed transaction.
Example
It is our opinion that the proceeds to be received by the applicant from the disposal of the shares do not fall within the ‘gross income’ of the applicant and are therefore not subject to income tax in the hands of the trust. Our reasons for this conclusion are set out in detail below.
The relevant portion of the definition of the term gross income’ in section 1(1) of the Act refers to ‘in the case of any resident, the total amount, in cash or otherwise,
received by or accrued to or in favour of such resident … during such year … of
assessment, excluding receipts or accruals of a capital nature …’
It follows that the amounts in question would be subject to the CGT provisions of the Act. The applicable provision is paragraph 2(1) of the Eighth Schedule to the Act. The relevant portions of that paragraph record that the Eighth Schedule ‘applies to the disposal after valuation date of …any asset of a resident …’
4. Tax implications
This section should set out a comprehensive description of the impact the proposed transaction may have upon the tax liability of the applicant or co-applicant, and where relevant, any connected person in relation to the applicant, including any and all relevant information regarding the financial or tax implication of the proposed transaction (section 79(4)(d) of the TA Act).
NOTE: PLEASE ENSURE THAT ALL FINANCIAL INFORMATION APPLICABLE TO THE
PROPOSED TRANSACTION IS PROVIDED AND THE RESULTING TAX ONSEQUENCES
THEREOF.
5. Application of the law
5.1 General
This section should provide the applicant’s interpretation of the relevant statutory provisions or issues (section 79(4)(i) of the TA Act). It should therefore briefly provide the rationale for interpreting the specific section/s of the Act on which a ruling is being sought in the manner as requested.
Example:
We believe that the proceeds from the disposal of the shares to investors do not fall within the ‘gross income’ of the applicant’s trust. This is because we believe that
these proceeds will be of a capital nature in the hands of the applicant. It is in respect of this conclusion that we seek a binding private ruling. We consider below the relevant case law which provides support for conclusion.
5.2 Applicable case law
This section should provide an analysis of the relevant authorities either considered by the applicant or of which the applicant is aware, whether those authorities support or are contrary to the proposed ruling being sought (section 79(4)(i) of the TA Act). Therefore case law for and against the specific ruling should be given.
6. Conclusion
Example
We request SARS’s confirmation that, for the reasons outlined above; the proceeds
from the disposal from the shares in NewCo would not constitute ‘gross income’ in
the hands of the applicant because they will be receipts of a capital nature. Therefore the proceeds will be subject to paragraph 2(1) of the Eighth Schedule to the Act.
Should you require any additional information or have any questions regarding this application please contact Mr X on (011) xxx-xxxx.
Yours faithfully
Mr X
Director
Tax Practitioner Reg No PR-xxxxxxx

Annexure A
Disclosure of required information
Detailed below is the information required to be submitted in accordance with section 79 of the TA Act
a. Applicants – Applicant’s postal address and telephone number – section 79(4)(a)
Applicant name
PO Box xx
Johannesburg
2196
Telephone Number: (011) xxx-xxxx – Applicant’s representative’s postal address and telephone number – section 79(4)(b)
Insert representative name
Insert company name
Private Bag X
Johannesburg
2052
Telephone: (011) xxx-xxxx
Fax Number: (011) xxx-xxxx
b. Reasons why the proposed ruling should be granted – section 79(4)(h)
Example
We submit that the proposed ruling should be granted so as to enable the applicant to dispose of the shares in NewCo.
c. Statement in terms of section 79(4)(i)
Example
This ruling application has fully considered the relevant statutory provisions and case law and it is considered that this ruling is consistent with such provisions and law.
d. Statement in terms of section 79(4)(j)
To the best of the applicants’ knowledge, and the applicants’ representative’s knowledge, the same or substantially the same issue upon which this ruling has been sought is not the subject of an audit examination, investigation, ruling application, objection, appeal, or other proceedings currently before SARS or the courts involving the applicant or any connected person in relation to the applicant.
e. Statement in terms of section 79(4)(n) and (o)
To the best of the applicants’ knowledge, and the applicants’ representative’s knowledge, the applicants, including class members if applicable, are fully tax compliant for all applicable taxes.
f. Description of the information the applicant believes should be deleted from the final ruling before publication – section 79(4)(k)
All references to the applicant’s name should be deleted from the final ruling before publication in order to protect the applicant’s confidentiality. We further suggest that the name of the companies forming part of the proposed transaction should also be deleted.

Annexure B
Letter of Consent
a. Person(s) to whom this ruling applies
This ruling letter has been applied for by ABC Company, tax registration number 123. The co-applicants for this ruling are PQR Company, tax registration number 456, and XYZ Company, tax registration number 789.
b. Relevant tax laws
Sections 79(4)(i) and 87 of the TA Act.
c. Consent
The applicants represented by XYZ legal firm, herewith consent to the publication of the advance tax ruling by SARS in accordance with 87 of the TA Act, provided that the publication is in such a form as does not reveal the identity of the applicants or class members. Before the final publication, SARS will provide a draft copy of the edited ruling for review and comment. It is understood that SARS’s
determination regarding the contents of the published ruling is final.

Annexure C
EXAMPLE OF A DRAFT RULING LETTER
1. Person(s) To Whom This Ruling Letter Applies
This ruling letter has been applied for by ABC Company, tax registration number 123. The co -applicants for this ruling are PQR Company, tax registration number 456, and XYZ Company, tax registration number 789.
2. Relevant Tax Laws
All legislative references are to the Income Tax Act No. 58 of 1962 (the Act).
The specific ruling has been requested in respect of section 45(4) of the Act.
3. Description of the Proposed Transaction
ABC Company, PQR Company and XYZ Company are all South African companies and are currently members of the same group of companies. ABC Company is the holding company for the group and currently owns 100% of the equity shares of both PQR Company and XYZ Company. PQR Company and XYZ Company are engaged in complementary lines of trade. In order to simplify the structure of the group and to improve efficiency, PQR Company is proposing to transfer all of its assets and liabilities to XYZ Company. Upon the completion of the transfer, PQR Company will liquidate into ABC Company. ABC Company and XYZ Company will continue to be members of the same group of companies.
4. Specific Conditions and Assumptions
Section 78(3) of the TA Act provides that a binding private ruling may be made subject to the conditions and assumptions prescribed in the ruling.
This ruling letter is made subject to the following conditions and assumptions:
• The transfer by PQR Company to XYZ Company constitutes an ‘intra-group
transaction’, as defined in section 45(1).
• ABC Company and XYZ Company will continue to be members of the same group of companies following the proposed transaction.
• This ruling letter does not apply in respect of any tax consequences that may arise if XYZ Company ceases to be a member of the same group of companies as ABC
Company.
• The proposed transaction is not part of or connected with any other transaction,
operation or scheme.
5. Ruling
The ruling made in connection with the proposed transaction is as follows:
• Pursuant to paragraph (c) of section 45(4), ABC Company and PQR Company will be deemed to be one and the same company for purposes of paragraph (b) of
section 45(4).
6. Period for which this ruling letter is valid
This binding private ruling will be valid for a period of [number] [in words] years from the date of the ruling.