Kilian, Eduard (2014-04)
Thesis (MAcc)--Stellenbosch University, 2014.
ENGLISH ABSTRACT: Since the recent credit crisis in 2008, innovative lending products have emerged to address the need for enterprises to maintain and improve their cash flows. One such product is the merchant cash advance (MCA). This form of finance is related to debt factoring and is essentially the business equivalent of a payday loan. In its most common form, a lump sum payment is made to a business in exchange for an agreed upon percentage of future credit and/or debit card receivables. A percentage of the merchant’s daily credit or debit card receivables is retained, either directly from the processor that clears and settles the credit or debit card payment or via a debit order from the merchant’s bank account, until the obligation has been met. The future receivables are purchased at a discount and a processing fee is also charged. Many merchant cash advance service providers (MCASP) structure their business in such a way that it resembles traditional debt factoring. In this manner, MCASPs endeavour to distinguish their product offering from traditional loans, in an effort to elude legislation that would affect loans, for example the limiting of interest rates charged. There is however currently a lack of definitive guidance on the taxation consequences from the perspective of the merchant utilising the product and the MCASP providing it. The purpose of this research is to investigate the taxation consequences of MCA transactions in South Africa in an attempt to provide such guidance. The key issue for consideration affecting the taxation consequences of MCAs is the classification of these transactions as either a form of debt factoring or as loans. The research considers and suggests the appropriate classification of these transactions. The taxation treatment is then considered based on this classification from the perspective the merchant utilising the product and the MCASP providing the product. Taxation issues investigated, include the income tax treatment of the discounting cost as “interest”, the availability of deductions allowed by the Income Tax Act and the Value-Added Tax consequences.
AFRIKAANSE OPSOMMING: Sedert die onlangse kredietkrisis in 2008 het innoverende leningsprodukte na vore gekom om te voorsien in die vraag van ondernemings om hul kontantvloei te handhaaf en verbeter. Een van hierdie produkte is die handelaarskontantvoorskot (HKV). Hierdie vorm van finansiering is verwant aan skuldfaktorering en is basies die besigheidsekwivalent van ‘n betaaldaglening. In die mees algemene vorm, word ‘n enkelbdragbetaling aan ‘n besigheid gemaak in ruil vir ‘n voorafbepaalde persentasie van die toekomstige krediet- en/of debietkaartdebiteure. ’n Persentasie van die handelaar se daagliske krediet- of debietkaart debiteure word teruggehou totdat die skuld afgelos is. Invordering vind plaas direk vanaf die verwerker wat die krediet- of debietkaartbetaling goedkeur en betaal, of deur middel van ‘n debietorder direk vanaf die handelaar se bankrekening. Die toekomstige debiteure word teen ‘n diskonto aangekoop en ‘n verwerkingsfooi kan ook gehef word. Baie handelaarskontantvoorskot-diensverskaffers (HKVD) struktureer hul besighede op so ‘n wyse dat dit soos tradisionele skuldfaktorering voorkom. Op hierdie manier beoog HKVD’s om hul produk van tradisionele lenings te onderskei, met die doel om wetgewing vry te spring wat lenings sou beïnvloed, byvoorbeeld beperkings op rentekoerse gehef. Daar is egter tans ‘n tekort aan beslissende leiding, wat die belastinggevolge betref, uit die perspektief van die handelaar wat die produk benut en die HKVD wat dit verskaf. Die doel van hierdie navorsing is om te ondersoek wat die belastinggevolge van HKV’e in Suid-Afrika is in ‘n poging om hierdie leiding te verskaf. Die kernaangeleentheid vir oorweging wat die belastinghantering affekteer, is die klassifisering van HKV-transaksies as ‘n vorm van skuldfaktorering of as lenings. Hierdie navorsing skenk oorweging aan hierdie transaksies en stel ‘n toepaslike klassifikasie voor. Die belastinghantering word dan oorweeg, gebaseer op hierdie klassifikasie uit die perskeptief van die handelaar wat die produk benut en die HKVD wat die produk verskaf. Belastingaangeleenthede wat ondersoek word, sluit die inkomstebelastinghantering van die diskonto gehef as “rente” in, die beskikbaarheid van aftrekkings toegelaat kragtens die Inkomstebelastingwet en die gevolge vir Belasting op Toegevoegde Waarde.
Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/86220