Frequency/market practice: Securities transfer tax (0.25% of the higher of purchase consideration and fair market value of the shares being transferred) levied against the target company, which bears the statutory obligation to pay the tax to the South African tax authorities. The company has the statutory right to reimbursement by the buyer. The parties may agree a different arrangement to address the effect of the tax liability. This could include sharing the tax or one party reimbursing the other.

Frequency/market practice: Common, but usually contained in the warranties schedule to the purchase agreement and not in a separate tax deed.