Category: South Africa

South Africa: The Implementation Of BEPS – How It May All Come Together

We are all aware of “base erosion and profit shifting” or “BEPS”. On 5 October 2015, the OECD released its final reports in connection with its BEPS Action Plan including its final report on Action 15 dealing with the development of a multilateral instrument to modify bilateral tax treaties (“Final… – Continue reading

Mauritius plans derivatives platform in bid for African business

Mauritius plans to launch a trading platform to hedge African currencies against the US dollar, part of a bid to expand its role as a financial hub for the continent, the financial services minister said. The Indian Ocean island is also in talks to boost ties with stock exchanges in… – Continue reading

Destination ‘filthy rich’: Where the wealthy go to get even richer

WELCOME to Switzerland. A mountainous country where nothing comes cheap but many of the world’s filthy rich come to grow their fortunes. The ongoing relationship between the wealthy and Switzerland looks set to only strengthen as the super rich get richer, according to a report released on Friday. That’s despite… – Continue reading


Multinationals operating in Kenya, Tanzania and Uganda will be among the first in Africa to feel the impact of new measures to be adopted in January to curb tax losses caused by manipulation of contracts between related companies. The three countries together with Nigeria, Ghana, Burkina Faso, Senegal, Botswana and… – Continue reading

Clampdown on tax evasion

As Common Reporting Standard (CRS) comes into operation. OHANNESBURG – South Africans with undeclared offshore funds may only have a few months to get their affairs in order or risk facing significant penalties and even criminal prosecution as revenue authorities start the automatic exchange of information. The Common Reporting Standard… – Continue reading

Kenya and South Africa tax deal takes effect in January

The Kenya-South Africa double taxation agreement comes into force from January 1. An announcement in the November 19, South African government gazette says the agreement applies for taxes withheld at source. “A resident of Kenya will not be taxed on any South African business profits, unless it carries on business… – Continue reading

It’s not too late to invest offshore

‘Offshore exposure should be a part of any well-balanced investment portfolio, regardless of the rand’s value’ – Duane Gilbert. Fund managers are very much aware of the impact of the weaker rand on investments, but for consumers not dealing with asset management on a daily basis it is a huge… – Continue reading

Amendments to CFC diversionary income rules

On July 22 2015, National Treasury released for comment the Draft Taxation Laws Amendment Bill, 2015 (DTLAB 2015), the Draft Tax Administration Laws Amendment Bill, 2015 (DTALAB 2015), and related Explanatory Memoranda. Section 9D currently provides for diversionary income rules which seek to impute into the income of South African… – Continue reading

Taxation of dividends payable by a South African company to a Cypriot shareholder

SARS may now impose a dividends tax on dividends paid by a South African company to a Cypriot shareholder as provided for in the Protocol to the current agreement for the avoidance of double taxation between South Africa and Cyprus. In terms of the current agreement for the avoidance of… – Continue reading

Ethiopia: Unmet Demands of the G20

The creation of the Group of Twenty (G20) was believed to serve as a remedy to the harsh realities of the world today. The initial formation of the Group of Seven G7 could do little to avert pertinent challenges both the developing and the developed nations face frequently. So a… – Continue reading

The implementation of BEPS – how it may all come together

We are all aware of “base erosion and profit shifting” or “BEPS”. On 5 October 2015, the OECD released its final reports in connection with its BEPS Action Plan including its final report on Action 15 dealing with the development of a multilateral instrument to modify bilateral tax treaties (“Final… – Continue reading

Advance payments by non-residents disposing of immovable property

Introduction Withholding obligation Proposed amendment Comment Introduction The 2015 Taxation Laws Amendment Bill proposes an amendment to Section 35A of the Income Tax Act (58/1962), dealing with withholding percentages from payments due to non-resident sellers of immovable property situated in South Africa. The proposed amendment raises interesting questions regarding compliance… – Continue reading

The Offshore Wrapper: a week in tax justice #71

Now that’s what I call a Big Tax Case A long running court case that has become known as the ‘Big Tax Case’ appears to be reaching a conclusion. It involves Scottish football club Rangers, who went bust in 2012. After it failed, a new company was created. It bought… – Continue reading

Zuma, G20 back growth

18 November 2015 – The Group of 20 (G20) leaders have called for more collective action to achieve strong, sustainable and balanced growth that can be universally beneficial. In a communique issued at the end of the summit, the leaders agreed that not only do they have to do more… – Continue reading

Widening the scope of Capital Gains Tax liability

One of the amendments proposed in the Taxation Laws Amendment Bill (TLAB), relates to the revision of the definition of “immovable property.” This definition is significant when considering the potential tax liability of non-resident persons, especially when it comes to capital gains tax (CGT). Paragraph 2 of the Eighth Schedule… – Continue reading

A company’s POEM cannot determine its ownership and control status

Under Indian foreign exchange regulations, Indian companies having foreign investment participation are generally categorised either as Indian owned and controlled company (IOCC), or foreign owned or controlled company (FOCC). An Indian company in such cases is considered as IOCC where they are owned and controlled by resident Indian citizens and/or… – Continue reading

Tax Transparency – the Common Reporting Standard: Implications for South Africa

Globally, taxpayers are becoming more interdependent, and engage in cross-border financial activities with more regularity. With this, comes the need for enhanced co-operation and understanding across countries on issues such as tax administration and transparency, to curb tax evasion and ensure a fair allocation of taxes to tax jurisdictions. “The… – Continue reading

Botswana: Bank Offers New Investment Product

Gaborone — Clients of Standard Chartered Bank Botswana should brace themselves for exciting times with the launch of the offshore fixed income proposition under its wealth management portfolio. Speaking at a breakfast launch with clients and media, the head of wealth management for Botswana and Southern Africa at Standard Chartered… – Continue reading

180 Participants From 47 Countries Attend CATA Confab In Melaka From Tomorrow

MELAKA: Some 180 participants from 47 countries will attend the five-day 36th annual Technical Conference of the Commonwealth Association of Tax Administrators (CATA) here from tomorrow. The Inland Revenue Board (IRB) said among the countries taking part in the conference are Australia, South Africa, Brunei, India, New Zealand, Canada, Pakistan,… – Continue reading

MTN Rwanda in $12 bn tax dispute

Telecoms giant MTN Rwanda is in talks with the revenue authority to settle a Rwf9 billion ($12 million) tax dispute out of court. In a case that has lasted over two years, the Rwanda Revenue Authority dragged MTN Rwanda, the country’s largest mobile phone services provider by market share, to… – Continue reading

Taxing the future

Although Finance Minister Nhlanhla Nene played it very close to his chest regarding the specifics of tax reforms we can expect in the February 2016 Budget, we’ve compiled a snapshot of the possible tax reforms announced in his 2015 Medium Term Budget Policy Statement. Corporate income tax There are great… – Continue reading

Transfer pricing drains us of tax blood

Transfer pricing by multinationals has cost South Africa an estimated R250 billion over three years and, with it, lost tax revenue. This is according to Sunia Manik, group executive for the large business centre at the SA Revenue Service (Sars), adding that it was being done through “service payments” made… – Continue reading

Bleak growth exposes malaise of revenue shortfalls

First it was the scourge of public sector corruption, until now the mortifying spectacle of South Africa’s post-apartheid transition. Now, with the ground shifting beneath the world’s sclerotic economy – and the past few years have produced more tremors than ever in the 21 years of democracy – it’s a… – Continue reading

Schroder Real Estate taps into hunger for offshore investment

Plans to list its European REIT on the JSE. Feeding South Africans’ seeming insatiable desire for rand-hedge stocks, Schroder Real Estate is planning to launch a European Real Estate Investment Trust (REIT), which will have a primary listing on the London Stock Exchange with a secondary listing on the Johannesburg… – Continue reading

‘SA is bleeding billions’

JOHANNESBURG – South African has lost R250 billion in the form of service payments over a three-year period, highlighting the significant risk base erosion and profit shifting (BEPS) is posing to the country’s tax base, a South African Revenue Service (Sars) official has said. Almost R80 billion of this were… – Continue reading

South Africa: South African Tax Legislation: Proposed Amendments In An International Tax Context

South African Tax Legislation: Proposed Amendments in an International Tax Context[1] This article sets out a brief summary of some of the proposed amendments introduced by recent South African draft Tax Bills. The article focuses on amendments in the context of international taxation. The draft Taxation Laws Amendment Bill, 2015… – Continue reading

Gold Fields, Sasol top in tax reporting

Gold Fields and Sasol have clinched the top awards in PwC’s Building Public Trust Awards: Excellence in the field of tax reporting in 2015. Gold Fields was the overall winner in the category for tax reporting for multinational companies, while Sasol was announced the overall winner in the category tax… – Continue reading

South African type controversy in Sri Lanka

(October 28, 2015, Colombo, Sri Lanka Guardian) “I and my family members have no secret accounts in Dubai banks,”said the Rajapaksa ‘Crown Prince’ Namal when the media published reports about a secret account in a Dubai bank of a son of a VVIP. The media reports stated that the Sri… – Continue reading

The Latest South African Tax Proposals are Far-reaching

There was a time when, from a tax perspective, South Africa’s “mini budget” used to be a non-event. The main emphasis was on the annual budget speech delivered in February each year when they announced tax policy proposals. However, over the past few years there has been an increasing tax… – Continue reading

INVESTIGATION: How MTN ships billions abroad, paying less tax in Nigeria

MTN has consistently prided itself as the foremost telephone company that is getting Nigerians talking the most. Now the South African company is about to set tongues wagging across networks with revelations that it has routinely been shipping billions of naira overseas to avoid paying its fair share of tax… – Continue reading

Agreements with Italy and Japan to avoid international double taxation

The negotiations conducted by the Ministry of Finance and the Internal Revenue Service (SII) for Chile to sign the agreements to avoid international double taxation with Italy and Japan have concluded successfully. “The successful completion of negotiations with two of the world’s major economies crown an exceptional year in strengthening… – Continue reading

Unpacking the Budget

“If we do not achieve growth, revenue will not increase. If revenue does not increase, expenditure cannot be expanded.” It is with this statement that the Minister of Finance set the tone of the Medium Term Budget Policy Statement (MTBPS) which he presented on Wednesday against a fiscal backdrop of… – Continue reading

The inaugural “Sudanese U-Turn” Prize for Creative Financial Chicanery is awarded to Credit Agricole

The French bank Credit Agricole will pay US regulators $787 million for flagrant violations of international sanctions against Iran, Sudan, and other countries. While it almost isn’t news anymore that a global bank got caught violating the law and will pay a giant fine to make up for it, we… – Continue reading

Mandatory disclosure rules: OECD releases final paper on BEPS 12

What has happened? On 5 October 2015 the OECD issued its final paper on BEPS Action 12 Mandatory Disclosure Rules, Action 12 – 2015 Final Report (Paper). In this Alert we highlight the main issues and recommendations for taxation reform raised in the Paper. The Australian Treasurer’s BEPS Press Release… – Continue reading

Treasury ignores pleas to retain incentives

National Treasury has decided to scrap a recently introduced incentive to make South Africa’s service sector more competitive, despite an impassioned appeal from multinational companies not to do so. The special foreign tax credit for service fees has protected companies from double taxation where South Africa’s treaty partners levied withholding… – Continue reading

Four things to watch in the Medium-Term Budget

What economists and tax practitioners expect to see. JOHANNESBURG – Finance minister Nhlanhla Nene (pictured) will once again be between a rock and a hard place when he presents his Medium-Term Budget Policy Statement (MTBPS) on Wednesday. With the economy under pressure and concerns about how government will balance its… – Continue reading

Treasury offers tax deduction to SA firms in Africa

SOUTH African companies with operations elsewhere in Africa, such as telecommunications giant MTN, have reason to breathe a little easier having earned a tax respite, albeit considered minor by tax experts. The Treasury has made a concession on the proposed repeal of foreign tax credits for fees on services provided… – Continue reading

The OECD/G20 base erosion and profit shifting (BEPS) project – an informed perspective

The BEPS Project involves input from the 34 member countries of the OECD, all G20 members, and more than 40 developing countries. The objective of the BEPS Project is to close gaps in international tax rules, effectively eliminating or substantially reducing BEPS; and to secure government revenues by ensuring that… – Continue reading

MTN bullies SA with jobs threat

South Africa is allowing MTN potentially lucrative tax credits on money sent from its African operations to a letterbox company in Mauritius. Last week, amaBhungane and Finance Uncovered, a global reporting project, exposed how MTN’s African subsidiaries send billions in management fees to MTN International in Mauritius. The Mauritian entity… – Continue reading

Mauritius plans derivatives platform in bid for African business – minister

EBENE, Mauritius, Oct 12 (Reuters) – Mauritius plans to launch a trading platform to hedge African currencies against the U.S. dollar, part of a bid to expand its role as a financial hub for the continent, the financial services minister said. The Indian Ocean island is also in talks to… – Continue reading

Ramaphosa and MTN’s offshore stash

Emmanuel Mayah, Jeff Mbanga, Francis Kokutse and Nick Mathiason contributed to this joint investigation by the M&G Centre for Investigative Journalism (amaBhungane) and Finance Uncovered, a global reporting project involving journalists in 54 countries. Shortly after Cyril Ramaphosa left MTN to become South Africa’s deputy president last year, he lashed… – Continue reading