Investor tax-driven preferences for dividends and share repurchases of listed companies

Nel, Rudie

doi:10.1080/10291954.2017.1414349

Cited by 7 publications

(8 citation statements)

References 11 publications

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“…The tax system in South Africa (also a classic system of double taxation of dividends comparable to the tax system in Poland) includes different tax rates on dividend income and capital gains. The current tax system in South Africa (a shareholder-level dividend tax) replaced the previous tax system (a company-level secondary tax on companies) on April 1, 2012 (Nel 2018). The change in the tax system during 2012 is argued as significant based on the effect on the after-tax values of distributions for shareholders as well as a different tax treatment of a general repurchase as opposed to a specific repurchase (Nel 2018).…”

Section: Share Repurchases In South African Lawmentioning

confidence: 99%

“…The current tax system in South Africa (a shareholder-level dividend tax) replaced the previous tax system (a company-level secondary tax on companies) on April 1, 2012 (Nel 2018). The change in the tax system during 2012 is argued as significant based on the effect on the after-tax values of distributions for shareholders as well as a different tax treatment of a general repurchase as opposed to a specific repurchase (Nel 2018). Taxes on dividends ranged from 12.5% to 10% for the period before April 1, 2012 and ranged from 15% to 20% for the period from April 1, 2012.…”

Section: Share Repurchases In South African Lawmentioning

confidence: 99%

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Share Repurchases Versus Dividends: A Comparison Between Poland And South Africa

Kaźmierska-Jóźwiak

Wesson

Steenkamp

2022

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The main aim of the study is to compare share repurchase and dividend payout trends of listed non-financial and non-resource companies in Poland and South Africa over the period 2005–2015. Although South Africa is a developing country with a dualistic economy, the country is characterized by a sophisticated stock exchange which is comparable to that of most advanced economies, while Poland was reclassified from emerging market to developed market status, effective as from 24 September 2018. Comparative analysis provides insights on the regulatory differences and the effect therefore on share repurchase and dividend behaviour, and whether these countries mirror the excessive payout behaviour observed in the United States of America (US). The study results show that in both countries dividends are the dominant form of payouts to shareholders. Moreover none of the examined countries mirrors the excessive payout behaviour observed in the US – neither in Poland, nor in South Africa did share repurchases surpass dividends. Regulatory differences between Poland and South Africa, however, affected the observed trends in payout behaviour between the two countries.

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Section: Share Repurchases In South African Lawmentioning

confidence: 99%

Section: Share Repurchases In South African Lawmentioning

confidence: 99%

Share Repurchases Versus Dividends: A Comparison Between Poland And South Africa

Kaźmierska-Jóźwiak

Wesson

Steenkamp

2022

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Section: Literature Reviewmentioning

confidence: 99%

“…Before 1 April 2012, a company needed to pay STC on the repurchase value when repurchasing its own shares, except when the repurchase was executed by subsidiaries (Nel, 2018). On 1 April 2012, STC was replaced by dividends tax (Nel, 2018). From this date onwards, the company is no longer liable to pay taxation when it executes a share repurchase (but dividends tax might be payable by the beneficial owner of the share) (Nel, 2018).…”

Section: Literature Reviewmentioning

confidence: 99%

“…On 1 April 2012, STC was replaced by dividends tax (Nel, 2018). From this date onwards, the company is no longer liable to pay taxation when it executes a share repurchase (but dividends tax might be payable by the beneficial owner of the share) (Nel, 2018). The preference for subsidiaries as repurchase entity noted in the pre-2010 period was associated with its favourable tax treatment.…”

Section: Literature Reviewmentioning

confidence: 99%

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Post-recession share repurchase behaviour by JSE-listed companies: transparent or not?

Steenkamp

Wesson

2020

JAEE

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PurposeShare repurchases are increasingly employed in South Africa. Disclosure on share repurchases in annual reports is poor, and a high percentage of share repurchases are not announced in real time on the Johannesburg Stock Exchange (JSE). A comprehensive database of share repurchases by JSE-listed companies has been created up to 2009, but post-recession repurchase behaviour is not known. This study aims to examine South African share repurchase behaviour (activity, repurchase entity, repurchase type and transparency) in the post-recession period and compare this to the 2000–2009 period.Design/methodology/approachComprehensive share repurchase data for all JSE-listed companies (excluding those in the basic materials and financial industries) were obtained by scrutinising annual reports and JSE announcements.FindingsThe repurchasing of shares reached a peak during the financial recession of 2008/2009, with share repurchases stabilising at a lower level post-recession. Repurchases executed by subsidiaries have decreased post-recession, probably owing to the introduction of dividends tax. However, 45% of the share repurchase value was not announced via the JSE (compared to 22% in 2000–2009).Practical implicationsReal-time JSE announcements of all share repurchases are required to improve transparency.Originality/valueOwing to low announcement rates, a lack of transparency relating to share repurchases was observed in South Africa post-recession. Enhanced corporate governance requirements could improve transparency.

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The timing of dividend declarations based on a forthcoming change in dividend tax regime

Nel

Wesson

2019

South African Journal of Accounting Research

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Investor tax-driven preferences for dividends and share repurchases of listed companies

Cited by 7 publications

References 11 publications

Share Repurchases Versus Dividends: A Comparison Between Poland And South Africa

Share Repurchases Versus Dividends: A Comparison Between Poland And South Africa

Post-recession share repurchase behaviour by JSE-listed companies: transparent or not?

The timing of dividend declarations based on a forthcoming change in dividend tax regime

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