Category: South Africa

Uganda: How MTN Uganda’s Offshore Stash Sent URA On the Hunt

MTN Uganda has been accused of failing to provide evidence to justify shifting huge amounts of cash out of Uganda to a briefcase company located in Mauritius, potentially lowering its tax bill in Uganda – the subject of which remains an ongoing dispute with Uganda Revenue Authority, it has emerged…. – Continue reading

Internal Revenue Service Begins Reciprocal Automatic Exchange of Tax Information Under FATCA IGAs

On October 2, 2015, the Internal Revenue Service announced that it had achieved a key milestone in implementation of the Foreign Account Tax Compliance Act (FATCA), a critical anti-tax evasion law passed by Congress in 2010 but not fully implemented until July 2014. The milestone announced by the IRS was… – Continue reading

It’s Here; The Automatic Exchange of Information Under FATCA Began September 30th

The IRS has announced that as of September 30, 2015 it will implement the automatic exchange of tax information as set forth in the Foreign Account Tax Compliance Act, (FATCA). The IRS Commissioner in announcing the implementation of the automatic exchange of information stated: “This information exchange is part of… – Continue reading

Commonwealth finance ministers to focus on global tax reforms co-operation

LONDON: Creating a more participatory approach to tax co-operation tops the agenda of this year’s meeting of Commonwealth finance ministers in Lima on October 7. Delegates will discuss the need for developing countries to be more active in global negotiations to prevent international tax avoidance and illegal tax evasion. The… – Continue reading

Cyprus: Double Tax Agreement Round-Up

The new Protocol to the Cyprus – Ukraine double taxation agreement The Cyprus Ministry of Finance has announced that agreement has been reached with Ukraine on a Protocol that will amend the existing DTA between the two countries. The existing DTA was signed in 2012 and entered into force on… – Continue reading

US Treasury Department adds India to its FATCA list

MUMBAI: The US Treasury Department has issued a list of 34 countries which includes India with whom it would share information under FATCA (foreign account tax compliance act) regulations. The pact aims to cover automatic sharing of information on bank accounts and other instruments like mutual funds, insurance and equities… – Continue reading

UAE expats and offshore banking: All you need to know

An offshore bank account is a must for many internationally mobile expats operating in the UAE and Middle East. But finding the right bank with the right extras as well as high service standards isn’t easy. There are plenty of big names to choose from, including the global operators Barclays,… – Continue reading

SA ranks above developed countries in ‘hidden’ money

SOUTH Africa has ranked higher than several developed countries in an assessment of money “hidden” in HSBC Swiss bank accounts, a report showed on Wednesday. “The money connected to SA was higher than money connected to France, eight times higher than that of the US, and 3.5 times more than… – Continue reading

‘Mistrust’ hampering continental trade

Pretoria – Trade between African countries remains low, despite efforts to harmonise taxation to allow for the free movement of goods and services. Tax experts this week warned mistrust between countries remains the greatest detractor to achieve harmony and increase intra-trade. Intra-Africa trade was only 11.3 percent of the continent’s… – Continue reading

Op-Ed: Anti-corruption march must tackle illicit financial flows

If the anti-corruption march goes ahead on Wednesday, it will be remiss if it doesn’t address one of the key issues of 2015: illicit financial flows. Institutions around the world are committing to combatting these and Unite Against Corruption needs to push the government to take action locally while lobbying… – Continue reading

Compliance costs banks dearly

Pretoria – The constant stream of new data requirements by the South African Revenue Service from South Africa’s major banks is costing the sector millions of rand and affecting the economy and banking costs. Tax heads at the banks raised questions during the recent Tax Indaba in Sandton about the… – Continue reading

Mauritius appoints minister for financial services

When Delta, a South Africa-based property investment fund, decided to switch the offshore domicile of its international operations from Bermuda to Mauritius a year ago, it gained unexpected benefits, reports the Financial Times. “We’ve been very pleased,” says Bronwyn Corbett, head of Delta, as she reflects on the success of… – Continue reading

New global tax crackdown could impact asset owners

A new wave of global tax compliance regulation is a game changer in the way asset owners and investment management companies report activities. Globalization of financial markets has made it increasingly simple to make, hold and manage investments outside an asset owner’s own tax domicile. A standard on automatic exchange… – Continue reading

Davis homes in on offshore tax evasion

High-net-worth, tax-evading South Africans will soon have nowhere to hide, because in future income tax returns will specifically ask them to declare if they have offshore trusts, or directly or indirectly control an offshore trust, Judge Dennis Davis, the convener of the Davis Tax Committee, says. If the South African… – Continue reading

Airbnb v. Uber: Sharing economy gets a mixed reception in Costa Rica

The night that Uber started offering its ride-hailing service in Costa Rica, vandals – reportedly taxi drivers – smashed the windows of one of the company’s cars in protest. Traffic police impounded two Uber vehicles earlier that same night. Airbnb, however, another staple of the so-called “sharing economy,” has been… – Continue reading

Malta – the optimum choice for private equity

Malta provides an outstanding opportunity for private equity and venture capital managers. It has a flexible LP structure, an extensive network of double tax treaties, a favourable local tax regime and experienced service providers who can provide a cost-effective solution,” comments Felicity Cole (pictured), Head of the Funds Department at… – Continue reading

Capital flight blamed for toxic labour relations

Johannesburg – The South African economy has been crippled by decades of transfer pricing and other forms of illegal capital flight by multinational companies, especially in the mining sector. This partly explained the country’s poisonous labour relations environment and led directly to the Marikana killings three years ago. These were… – Continue reading

KPMG offshore ‘sham’ deceived tax authorities, CRA alleges

A wealthy Victoria, B.C., family paid virtually no tax over a span of eight years – and even obtained federal and provincial tax credits – while being involved in an offshore tax “sham” developed by one of the country’s most respected accounting firms, the Canada Revenue Agency alleges. The Canada… – Continue reading

Cyprus: The New Protocol To The Cyprus–South Africa Double Taxation Agreement

On April 1, 2015, Cyprus and South Africa signed a Protocol amending their existing double taxation agreement (“DTA”), which was signed in 1997 and has been in force since December 8, 1998. At the time the original DTA was concluded, dividends arising in South Africa were not subjected to South… – Continue reading

Transfer pricing remains thorny issue for international trade

Multinational companies are facing far more expansive and complex audits by tax authorities fighting over the same pot of profits as budget deficits continue to increase, reports BD Live. An inevitable outcome of efforts globally to prevent tax bases from erosion is double taxation and increased disputes over adjusted assessments… – Continue reading

Ex parte preservation orders: Krok v CSARS

This case was an appeal from the Gauteng Division of the High Court to the Supreme Court of Appeal (“SCA”) pertaining to the correctness of the granting of an ex parte preservation order application that was brought against Mr Krok by the Commissioner of the South African Revenue Service (“SARS”) in… – Continue reading

STM scopes out Australian QROPS offering as business booms

International pensions administrator STM Group is looking to offer QROPS tailored for UK expats in Australia after HMRC scrapped thousands of schemes from its approved list in July. During an interview with International Adviser, STM – which has trading offices in both Malta and Gibraltar – cited plans to expand… – Continue reading

Survey: Business leaders would pay more tax for greater clarity

Three-quarters of global business leaders would accept higher taxes in exchange for greater clarity on acceptable tax planning, the Grant Thornton International Business Report has found. The survey of 2,580 businesses in 35 countries noted a significant increase from the last time the question was asked – last year –… – Continue reading

SARS Issues Revised Individual Income Tax Guide

The South African Revenue Service has issued an updated version of its Guide on Income Tax and the Individual to inform South African residents of their income tax obligations. SARS emphasizes that the Guide does not attempt to cover every tax matter, but does attempt to provide clarity on the… – Continue reading

FATCA legislation to impact the South Africa financial services sector

South African companies who do direct and indirect business with US organisations, whether in South Africa, Africa, Europe or further afield, must comply with the United States Foreign Account Tax and Compliance Act (FATCA,) or risk being excluded from lucrative markets the world over, reports the Cape Business News. This… – Continue reading

Cyprus: The New Protocol To The Cyprus – South Africa Double Taxation Agreement

On 1 April 2015 Cyprus and South Africa signed a Protocol amending their existing double taxation agreement (“DTA”), which was signed in 1997 and has been in force since 8 December 1998. The Protocol amends the 1997 DTA in three areas, namely the definition of residence, withholding taxes on dividends… – Continue reading

SA taxpayers have nowhere to hide

South Africans with undisclosed offshore accounts may feel exposed after their offshore Swiss bank account information found its way into the public domain this year. The theft of information relating to some 30 000 HSBC accounts – the biggest banking leak in history – actually took place five years ago… – Continue reading

Business Leaders Doubt Global Agreement On BEPS

Only 23 percent of business leaders feel that recommendations from the OECD on base erosion and profit shifting will be successfully implemented, according to the findings of a new survey by Grant Thornton. Three quarters of business leaders would pay more taxes in exchange for greater clarity from authorities on… – Continue reading

Revenues surge as global crackdown on tax evasion gathers pace

Hundreds of millions of tax dollars are flooding into exchequers across the world, as governments offer evaders a last chance to own up to undeclared accounts, reports the Financial Times. Taxpayers with funds stashed offshore are coming forward voluntarily in their tens of thousands ahead of new transparency rules that… – Continue reading

Sars to waive penalties for voluntary disclosure?

Fears of a VDP application giving rise to a ‘witch hunt’ are ill-founded. The rapid development in international tax transparency over the past two years in the form of the OECD (Organisation for Economic Co-operation and Development) Common Reporting Standard (CRS) has caused many South African taxpayers to consider regularising… – Continue reading

Tax Horror Defying Modi Causes AIG to Shun Cover for India Deals

Prime Minister Narendra Modi needs to offer much more than just his best intentions to clean up India’s whimsical tax regime to help convince insurers. Companies from Allianz SE to American International Group Inc. are avoiding offering tax-liability coverage in India’s cross-border mergers and acquisitions market because of a relatively… – Continue reading

Tax havens not safe for much longer

South Africans with unauthorised funds abroad better get their affairs in order because tighter regulation in tax havens will soon become a harsh reality, a tax expert has warned. Tony Davey, director at boutique consulting firm Tony Davey and Associates, says South Africans with offshore funds (foreign inheritances, foreign earnings… – Continue reading

Business leaders renew appeal for clarity on ‘acceptable’ tax planning

LONDON–(BUSINESS WIRE)–Three quarters of business leaders would pay more taxes in exchange for greater clarity from authorities on what is acceptable, according to the Grant Thornton International Business Report (IBR), a global survey of 2,580 businesses in 35 economies. And while few expect a global agreement any time soon, the… – Continue reading

SARS wants exchange of information treaties to include tax information

THE South African Revenue Service (SARS) wants to be able to share disclosed financial information with countries with which it has multilateral exchange of information agreements. The ability to automatically exchange information with revenue authorities and with SA’s treaty partners would allow SARS to expand its tax base and help… – Continue reading

‘Tax havens will chase out non-compliant taxpayers’

As global efforts to close loopholes intensify. JOHANNESBURG – South Africans with unauthorised funds abroad better get their affairs in order because tighter regulation in tax havens will soon become a reality, a tax expert has warned. Speaking at a recent seminar hosted by The Wealth Corporation, Tony Davey, director… – Continue reading

South Africa: Taxation Of Trusts Revisited

The Davis Tax Committee’s First Interim Report on Estate Duty (“DTC Report”) was released for public comment on 13 July 2015. In essence, the DTC Report proposes that “a highly progressive tax that patches loopholes, helps provide equality of opportunity and reduces the concentration of wealth, must be implemented”. The… – Continue reading

Tax Court rules on creation of permanent establishment in South Africa

Where a foreign company renders professional services to a South African company in South Africa, 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… – Continue reading

South Africa: Country-By-Country Reporting In South Africa

On 8 June 2015, the Organisation for Economic Co-operation and Development (“OECD”) released a Country-by-Country Reporting Implementation Package developed under the OECD’s base erosion and profit shifting (“BEPS”) Action Plan 13: Re-examine Transfer Pricing Documentation. BEPS was identified as a risk to tax revenues, tax sovereignty and the tax fairness… – Continue reading