South Africa: Proposed changes to anti-avoidance rules for hybrid equity instruments withdrawn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