Deducting another group company's expenses: section 11(a)

Tax Break: South African tax for professionals · Oct 22, 2026 · 17m

Can one group company deduct the operating costs of another under section 11(a) of the Income Tax Act? This episode examines a tax court judgment on a South African subsidiary of a US-listed group that paid the care and maintenance costs of a related chrome mine, Clarice Mining, and claimed those costs as a deduction.

The episode sets out the facts: the chrome offtake agreement, the plant the taxpayer built on the mine's premises, and the clause that made the taxpayer liable for the mine's operating costs if it went into care and maintenance, as happened in 2018 to 2020. Two categories of…