Are Africa’s Laws ‘Business Ready’ for Intra-African Investment?

On 3 July 2026, the Cape Town Tax Court delivered a landmark judgment in Company AF (Pty) Ltd and Others v Commissioner for the South African Revenue Service, marking the first reported judicial decision to apply South Africa's General Anti-Avoidance Rules ("GAAR") to a dividend-stripping arrangement. The judgment represents a significant development in South African tax jurisprudence and provides important judicial guidance on the circumstances in which corporate restructuring and acquisition transactions may be regarded as impermissible tax avoidance rather than legitimate tax planning. 

The decision follows shortly after the Constitutional Court's judgment in Absa Bank Ltd v Commissioner for the South African Revenue Service, which reshaped the interpretation of the GAAR by clarifying the appropriate counterfactual analysis for determining whether a tax benefit has been obtained and reaffirming the objective nature of the statutory purpose enquiry under Part IIA of the Income Tax Act 58 of 1962. Building upon that precedent, the Tax Court considered whether a complex acquisition structure, designed to convert taxable capital gains into exempt inter-company dividends, could withstand scrutiny under South Africa's anti-avoidance regime.