South Africa: Proposed changes to anti-avoidance rules for hybrid equity instruments withdrawn

Future reforms will follow consultation with stakeholders to achieve a balanced outcome. 

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September 5, 2025

National Treasury on September 3, 2025, withdrew proposed amendments to section 8E of the Income Tax Act published in August 2025 aimed at strengthening anti-avoidance rules for hybrid equity instruments . Read TaxNewsFlash

The reasons cited for the withdrawal were concerns from stakeholders about broad and uncertain application, risk to preference shares as a source of finance, and potential negative impact on existing transactions and investment flows.

National Treasury indicated that future reforms will follow consultation with stakeholders to achieve a balanced outcome.

Read a September 2025 report prepared by the KPMG member firm in South Africa

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