Category: South Africa

Third party returns – exchange of information in accordance with international tax standards

In order to provide the necessary legislative amendments required to implement the tax proposals that were announced in the 2015 National Budget on 25 February 2015, the National Treasury (Treasury) published the 2015 Draft Tax Administration Laws Amendment Bill (TALAB) on 22 July 2015 for public comment. One of the… – Continue reading

OECD Proposes South African Tax Revenue Increases

In its annual survey of the South African economy, the Organisation for Economic Co-operation and Development (OECD) has recommended measures to increase tax revenue and meet the country’s requirement for higher public spending on infrastructure and welfare. At the presentation of the survey, OECD Secretary-General Angel Gurria said that “more… – Continue reading

Tax disclosure programme has some flaws, say experts

HE Voluntary Disclosure Programme introduced in 2012 to encourage taxpayers to regularise their affairs has some flaws that need addressing to be able to expose the real amount of money that has left SA illegally. Tax experts warn that the process in SA is relatively expensive, there are uncertainties because… – Continue reading

South Africa: EFF Condemns the Police Protection of the British American Tobacco

The Economic Freedom Fighters condemns the undue police protection that the imperialist multinational corporation, British American Tobacco (BAT), enjoys. It has been reported that this cigarette company which controls 80% of the tobacco industry in South Africa has been given members of the police elite squad, the Tactical Response Team,… – Continue reading

Cross-border action raises tax risks

The rising exchange of information between countries is also leading to the disclosure of more details about these taxpayers’ affairs. Along with other countries, SA is paying closer attention to its residents’ cross-border activities. But while compliance is necessary, industry experts warn that overly aggressive tax enforcement in SA could… – Continue reading

BEPS Action 8: OECD proposes introducing hindsight into the transfer pricing of hard-to-value-intangibles

On 4 June, the Organisation for Economic Co-operation and Development (“OECD”) published a discussion draft on “hard-to-value-intangibles” in terms of which the OECD proposes revising its Transfer Pricing Guidelines. In particular, it is proposed that tax authorities will be allowed to use ex post “evidence”, (i.e. hindsight), to assess the… – Continue reading

Tax snippets

Treaty developments Following last month’s report that the Mauritius/South Africa double tax treaty had been ratified in Mauritius, the treaty has now come into force on 28 May 2015. The new Hong Kong/South Africa double tax treaty, which was signed last year, has been ratified in Hong Kong on 3… – Continue reading

Abuse of tax treaties must end

Agreement with Mauritius to be renegotiated. National Treasury says the abuse of double tax agreements by multinational companies is the main reason why the agreement with Mauritius has been renegotiated. National Treasury head of tax and financial sector policy Ismail Momoniat says companies have often used dual tax residence structures… – Continue reading

700 people apply for Malta’s Citizenship scheme – Henley & Partners vice-chairman

Around 700 people have applied for Malta’s ‘cash-for-passports’ scheme, described as on the most popular schemes run by Henley & Partners, their vice-chairman Andrew Taylor said during a radio interview on a South African radio station, reports the Maltese Independent. Extolling the virtues of the scheme, Mr Taylor said that… – Continue reading

Controversial South Africa – Mauritius treaty clarified in new MoU

The MoU is designed to give some insight into the process that will be adopted by the fiscal authorities of the two countries when assessing the tax residence of a ‘person’. International investors including South African businesses already use Mauritius as their base for their growth on the continent, but… – Continue reading

Govt to add more and raise taxes

AMidst the continued decline in the country’s Southern African Customs Union (SACU) receipts, government has decided to enhance domestic revenue which will see the introduction of new taxes and a possibility of increasing some. Minister of Finance Martin Dlamini speaking during breakfast meeting hosted by the Federation of Swaziland Employers… – Continue reading

Kenya: New campaign to stop Africa’s $50 billion a year illicit outflow

A new campaign to stop Africa from ‘bleeding’ was launched on Thursday in Nairobi by the Tax Justice Network-Africa (TJN-A), a coalition of researchers and activists focused on the harmful impacts of tax avoidance, tax competition and tax havens. “If we can stop Africa from losing resources in illicit outflows,… – Continue reading

Tax treaty with Mauritius blocks outflow

A new treaty makes it more difficult for companies to take advantage of tax loopholes to avoid their financial obligations. Globally, initiatives are afoot to close tax loopholes and South Africa is one of the frontrunners – its new treaty with Mauritius removes the allure for tax-shy corporates doing business… – Continue reading

FATCA – Which Countries Are In And Out

FATCA – Which Countries Are In And Out The controversial US Foreign Account Tax Compliance Act (FATCA) law is set to start from July 1, 2014, so with less than 21 days to go, here’s a look at which countries are in and who is outside of the tax network…. – Continue reading

South Africa: Country-Mauritius Tax Treaty Comes Into Force

Pretoria — Government has gazetted the South Africa-Mauritius tax treaty which came into force at the end of May, said National Treasury. “This new treaty reflects changes in the tax policies of the two countries and is in line with international best practices to deal with tax abuse as outlined… – Continue reading

Global net closes on tax dodgers

International tax rules will soon change, but companies’ behaviour may change sooner. There will soon be fewer places for multinational companies and ultra-rich individuals to squirrel away money. In November leaders of the G20 are expected to adopt a full range of measures to curb the practices of base erosion… – Continue reading

Swiss attorney general cites 53 possible money-laundering incidents in FIFA World Cup probe

BERN, Switzerland – Reeling from an American federal investigation of bribery in soccer, FIFA was put under more pressure Wednesday as the scale of a separate Swiss investigation of suspected money laundering was revealed. Banks in Switzerland have flagged up 53 possible acts of money-laundering that could be linked to… – Continue reading

Disgraced Fifa Boss Stashed $1m At Cibc Bahamas

A disgraced senior FIFA official has agreed to forfeit 50 per cent of the $1 million he had stashed away in a secret CIBC FirstCaribbean International Bank (Bahamas) account, court documents have revealed. The plea agreement between the US federal authorities and Charles (Chuck) Blazer, which was unsealed late on… – Continue reading

New tax treaty with Mauritius may affect cross-border investment

THE new double-tax treaty between SA and Mauritius is set to come into force in January next year, following a controversial renegotiation to better protect the South African tax base. However, tax experts have warned that sweeping changes to the treaty, including withholding taxes for interest (10%) and royalties (5%)… – Continue reading

Wal-Mart Has $76 Billion in Overseas Tax Havens, Report Says

Wal-Mart Stores Inc. owns more than $76 billion of assets through a web of units in offshore tax havens around the world, though you wouldn’t know it from reading the giant retailer’s annual report. A new study has found Wal-Mart has at least 78 offshore subsidiaries and branches, more than… – Continue reading

Tax consequences of foreign companies rendering services in South Africa

Where a foreign company renders professional services to a South African company, it is important that the foreign entity considers whether, as a result of rendering such services, the foreign company will create a permanent establishment in South Africa. The reason why this becomes important is that where a foreign… – Continue reading

Transfer pricing is a tricky game

The resurgent interest in transfer pricing abuse by multinationals might be missing the first “link in the chain” – the shifting of profits inside South Africa to the detriment of empowerment partners, workers, communities and the economy. This is the emerging line from a prominent think-tank, the SA Mining Development… – Continue reading

Argentina tax agency blames late Fifa finance head

Afip has blamed Julio Grondona for authorising a $10-million payment that prosecutors have characterised as a bribe to vote for SA for World Cup 2010. Julio Grondona, a former Fifa vice-president and head of finance who ran Argentina’s soccer federation from 1979 until his death last year at 82, will… – Continue reading

SARS to employ more tax specialists to deal with base erosion, profit shifting

THE South African Revenue Service (SARS ) is to significantly beef up its capacity to deal with base erosion and profit shifting, which has received intense focus by MPs over the last few months. SARS commissioner Tom Moyane said on Wednesday 24 more tax specialists would be employed in the… – Continue reading

Africa: A Journey Toward an African Taxation Renaissance

Africa is known as the ‘paradox of plenty’. How can a continent so rich in natural resources be so poor? Economic growth is predicted to increase by 4.5% across the continent this year, despite falling oil prices and the Ebola crisis. South Africa’s economy, the second biggest in Africa is… – Continue reading

Regional Co-operation on Taxation: Avoiding harmful tax competition

The objectives of the Southern African Development Community (SADC) Protocol on Finance and Investment include enhancing the productive capacity of the economies in the region and thereby increasing trade opportunities to eventually alleviate poverty. To achieve the objectives, various strategies can be employed, including, among others, improving the investment regime,… – Continue reading

Africa loses $50 billion a year through tax avoidance and fraud, report states

Addis Ababa, 19 May 2015- (ECA) – Africa’s money that could be used to improve lives and reduce poverty is leaving the continent through illicit financial flows defined as money illegally earned, transferred and used. As the Chairperson of the High Level Panel on Illicit Financial Flows from Africa, the… – Continue reading

Chairman Royce, Rep. Pallone welcome US-Amenia Trade & Investment Framework Agreement

The advantages of off-shore investments Two of the top reasons that South African investors are given to encourage offshore investments are that going offshore diversifies your portfolio and that it gives you access to sectors you could never find on the resource-heavy JSE. “While those are not reasons to be… – Continue reading

Cyprus: A Protocol On The Double Tax Treaty Was Signed Between Cyprus And South Africa

A Protocol amending the Agreement for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income and on Capital between South Africa and Cyprus was signed on the 1st of April 2015. According to the Protocol, Article 10 (“Dividends”) of the Double Tax Treaty… – Continue reading

Online tax laws holding SA companies back

South African companies are unable to compete with multinationals selling goods and services online in the country, partly as a result of tax laws. This is according to financial services group PwC, which argues that the country has not kept pace with the changing global economy. “Currently, multinationals in the… – Continue reading

The conundrum of the interplay between interest deduction limitations, interest withholding tax and double tax agreements

The deductibility of interest has for years been a contentious issue and this has been reaffirmed with the introduction of section 23M into the Income Tax Act No 58 of 1962 (the “Act”) with effect from 1 January 2015. A further addition to the interest sphere of income tax is… – Continue reading

New tax rules proposed for e-commerce transactions

In the 2015 Budget Speech presented to the National Assembly on 25 February 2015 the Minister of Finance announced that amendments will be proposed to change the rules for the digital economy in line with the latest guidance issued by the Organisation for Economic Co-operation and Development (“OECD”) in its… – Continue reading

The Davis Tax Committee on BEPS and the transfer pricing of intangibles in South Africa

The Davis Tax Committee (“DTC”) recently addressed the issue of base erosion and profit shifting (“BEPS”) in South Africa. The international importance of transfer pricing was once again emphasized when 4 out of the 15 actions identified in the OECD Action Plan on BEPS related to transfer pricing. The 15… – Continue reading

Shivambu suggests raft of ‘aggressive’ steps to deal with transfer pricing abuse

COMPANIES that engaged in tax avoidance practices such as the abuse of transfer pricing should be expropriated without compensation, Economic Freedom Fighters (EFF) MP Floyd Shivambu proposed in Parliament on Wednesday. This was one of a raft of “aggressive” measures that he believed the government should adopt to deal with… – Continue reading

South Africa’s Non-Resident Entertainment Royalty or Similar Payment Withholdings

There has been a lot of uncertainty with regard to withholding taxes imposed by the South African Revenue Service (SARS) on cross-border payments made by South Africans to offshore recipients, and the ambiguous administrative and compliance procedures relating thereto. Based on the information available directly from SARS, any amounts received… – Continue reading