Fyncor Advisory | Client Intelligence Brief | August 2026
Author: Willem J. Oberholzer
Chief Executive Officer
CA(SA) | MCom(Tax) | Chartered Tax Advisor
FYNCOR ADVISORY
10 minutes read time
Over the past month, a common theme has emerged from the transactions, restructurings, estate-planning assignments, tax reviews and technical research passing through Fyncor Advisory.
The tax legislation remains important. But increasingly, the real risk is not that businesses do not understand the headline rate of tax. It is that the legal documents, accounting treatment, board decisions, tax records, commercial substance and actual movement of funds do not tell the same story. For directors, shareholders and business owners, that distinction matters.
A transaction that appears commercially straightforward can create an entirely different tax result when its legal implementation is examined. Equally, a technically correct tax position can become difficult to defend where the contemporaneous evidence is incomplete. This month’s Fyncor Client Intelligence Brief considers some of the lessons emerging from our recent advisory work and research.
We hope you find this brief useful. As always, the Fyncor team is available to discuss how these themes apply to your own transactions, structures or exposures.
In This Edition
• Corporate transactions: structure before signature
• Anti-avoidance: commercial substance is becoming more important
• Tax disputes: records create leverage
• Family wealth: solve the tax problem before moving the asset
• Estate planning: liquidity matters as much as inheritance
• VAT evidence: the transaction must be provable
• SARS and the move towards digital VAT
• Tax residence and international structures: facts still dominate
• What should business owners and boards do now?
• Fyncor Closing Insight
Corporate transactions: structure before signature
During August we worked on several substantial corporate restructuring and shareholder transactions. Although the underlying commercial objectives differed, the lesson was remarkably consistent: tax analysis needs to take place before the transaction documents are finalised. In one category of transaction, the commercial objective involved an existing shareholder exiting while a new investor introduced capital. At first glance, the economic result appeared relatively simple. The tax analysis was not.
Share repurchases, new share subscriptions, contributed tax capital, dividends, financing arrangements and the movement of cash between related entities can each have different tax consequences. When these steps form part of one integrated transaction, their sequence and legal character become critical. The practical lesson for boards is straightforward: A spreadsheet showing where the money ultimately ends up is not a substitute for understanding why each payment is legally being made.
Before signing a material restructuring, management should be able to reconcile the legal agreements, funds-flow memorandum, accounting entries, tax treatment and board resolutions. If those documents describe materially different transactions, the structure requires further work.
Anti-avoidance: commercial substance is becoming more important
Recent work has also reinforced the importance of South Africa’s general and specific anti-avoidance provisions. There is a dangerous tendency to ask whether an individual step in a transaction is technically permitted without considering the transaction as a whole. That is no longer sufficient.
The correct question is increasingly whether the complete arrangement has a coherent commercial rationale, whether the rights and obligations created by the documents reflect economic reality and whether the tax outcome follows naturally from the commercial transaction rather than driving it. This does not mean taxpayers must organise their affairs to pay the maximum amount of tax.
It does mean that commercially significant restructurings should be capable of being explained without first explaining the tax benefit. Our recent work on complex corporate transactions has therefore placed significant emphasis on contemporaneous commercial rationale, financing substance, governance approvals, valuations and evidence supporting the actual implementation of the arrangement.
Tax disputes: records create leverage
Our research into recent South African tax disputes has repeatedly returned to another basic principle: evidence creates negotiating power. Prescription, assessments, objections, deductions and SARS information requests can all turn on what can actually be demonstrated.
A taxpayer may have a strong technical argument but still face difficulty if agreements are missing, accounting records cannot be reconciled, valuations were never documented or decisions were reconstructed years later. This is why good tax governance is not simply defensive administration. It is an asset.
Businesses that maintain proper tax files, board records, transaction memoranda and reconciliations are generally better positioned to resolve disputes before they become prolonged litigation.
Family wealth: solve the tax problem before moving the asset
Another major area of work during the month involved family-owned businesses, trusts, succession planning and the separation of economic interests between family members. These matters demonstrate why tax planning cannot be separated from family governance.
Where significant assets have appreciated substantially over many years, a decision to move an asset from a company, trust or family investment structure can crystallise tax that has effectively remained deferred while the asset remained within the structure. The important question is therefore not merely: “Who should own the asset?” It is: “What tax event occurs when ownership changes?” Capital gains tax, dividends tax, trust taxation, donations tax and the tax treatment of loans can interact with company law, trust law, matrimonial arrangements and succession planning. We have seen repeatedly that changing the legal ownership of an asset simply to achieve a family or commercial objective may create unnecessary tax leakage.
Sometimes the better solution is to restructure rights, governance or economic participation while leaving valuable underlying assets where they are. The principle is particularly relevant to owners of mature family businesses: restructuring should begin with a map of the existing tax attributes and embedded gains before anyone signs a transfer agreement.
Estate planning: liquidity matters as much as inheritance
Our estate-planning work during August produced another recurring lesson. A will identifies who should receive assets. It does not necessarily explain how the resulting taxes, liabilities and administration costs will be funded. For families with property, investments, private-company shares, trusts and offshore interests, estate planning therefore requires more than drafting a will. The planning should model capital gains tax on death, estate duty, available abatements and rollovers, liquidity requirements, beneficiary consequences, ownership structures and the practical administration of the estate.
This becomes particularly important when most of the family’s wealth consists of illiquid assets. A substantial estate on paper can still face a liquidity problem if taxes and liabilities become payable before assets can sensibly be realised. Good estate planning consequently asks two questions simultaneously:
• What happens to the assets?
• And where will the cash come from?
VAT evidence: the transaction must be provable
Our recent research into proposed changes affecting second-hand goods illustrates the same principle from another direction. Where a VAT deduction depends upon a real acquisition, the business must be able to demonstrate the identity of the counterparty, the existence of the goods, the value attributed to them and the records required by the legislation.
The tax invoice or accounting entry is not always the evidence. It is often merely the conclusion produced by the evidence. This principle reaches far beyond the second-hand goods industry. Whether dealing with VAT, deductions, management charges, loans, asset acquisitions or restructuring expenses, taxpayers should increasingly ask: “If SARS examined this transaction three years from now, could someone who was not involved understand exactly what happened from the documents alone?” If the answer is no, the evidentiary file is incomplete.
SARS and the move towards digital VAT
One of the most significant tax-administration developments during August was SARS’s publication of its VAT Modernisation Consultation Paper. SARS envisages a future model incorporating e-Invoicing, e-Reporting and substantially greater access to structured transactional data, with implementation intended to occur progressively. SARS has invited stakeholder comments by 16 October 2026. For businesses, this is potentially far more significant than a change to a tax return.
VAT compliance has historically depended heavily on businesses preparing information and submitting it periodically to SARS. A more integrated digital environment moves compliance closer to the underlying transaction.
That changes the risk. Incorrect VAT codes, poor customer and supplier master data, inadequate tax invoices, reconciliation differences and weak accounting controls may increasingly become visible before a traditional SARS verification ever takes place. Businesses should therefore begin thinking about VAT modernisation as a systems and governance project rather than merely a tax department project. The organisations best positioned for this transition will be those whose accounting records already produce reliable tax information without substantial manual intervention.
Tax residence and international structures: facts still dominate
Cross-border tax residence and international business structuring have remained another substantial component of our advisory work. For individuals, determining whether South African tax residence has ceased is rarely solved by simply producing a foreign residence visa or tax certificate. The historical facts, intention, pattern of living, location of family and economic interests, South African connections and applicable treaty position need to be considered together. For companies expanding internationally, the same principle applies.
The UAE continues to offer South African businesses a compelling location from which to establish genuine international operations, headquarters, procurement activities and investment platforms, but the UAE tax environment is also becoming considerably more sophisticated. On 25 August 2026, the UAE Ministry of Finance issued Ministerial Decision No. 133 of 2026 dealing with entities required to file the Pillar Two Information Return under the UAE’s Top-up Tax regime. The Decision applies to fiscal years commencing on or after 1 January 2025. This does not undermine the UAE as an international business centre.
It reinforces an increasingly important distinction. The future belongs to properly governed international structures with people, decision-making, commercial activity and substance, not structures that exist primarily on incorporation certificates.
What should business owners and boards do now?
The work of the past month suggests five practical priorities.
• First, involve tax advisers before transaction documents are signed rather than asking for a tax opinion after the commercial structure has become irreversible.
• Second, reconcile legal agreements, accounting entries, funds flows and tax positions. They should describe the same transaction.
• Third, review the quality of tax evidence. Material transactions should have a contemporaneous file capable of surviving scrutiny several years later.
• Fourth, begin considering the systems implications of SARS’s proposed digital VAT environment. Poor transactional data is becoming a tax risk.
• Finally, review older family, trust, estate and corporate structures periodically. Structures that were appropriate ten or twenty years ago may no longer reflect the family’s commercial objectives, current legislation or the value of the underlying assets.
Fyncor Closing Insight
One of the clearest lessons from our advisory work is that the most expensive tax problems often begin with perfectly reasonable commercial decisions made in the wrong sequence.
Tax planning should therefore not be viewed as finding a clever answer after a transaction has occurred. Its greatest value is earlier.
It allows the commercial objective, legal structure, taxation, governance and evidence to be designed together. That is where good advice protects value.
Author(s)
Willem J Oberholzer
CA(SA), MCom Tax
Willem Oberholzer is a strategic leader in tax, financial management and executive governance, with more than 30 years’ experience across top-tier professional services and industry. Willem previously served as the CEO of Probity Advisory. Willem combines deep technical expertise with a proven track record of turning around businesses, expanding client footprints, and delivering shareholder value. He holds a Bachelor of Commerce in Accounting Honours Degree and Masters in Tax from the University of Pretoria. Willem is a qualified Chartered Accountant (SA).