Author: Roxanna Nyiri, Director, BDO Tax. Insurance in todays world is no longer limited to a single country and has over the last few decades seen interesting global developments. Reinsurance and cell captive insurance have become an integral part of enterprise risk management. Reinsurance and cell captive insurance not only provide business with tools to manage their risk, limit their cost of insurance, but also to hedge against currency fluctuations. These developments, of course, also have their own unique tax consequences, especially where they span jurisdictional borders. With the advent of the Organisation of Economic Cooperation and Developments (OECDs) Base Erosion and Profit Shifting (BEPS) initiatives, tax authorities across the globe are scrutinising insurance structures from a tax perspective, especially with regard to transfer pricing. This increased scrutiny often leads to the cross border pricing related to intercompany insurance related transactions being challenged.
Author: Nyasha Musviba
New double-taxation treaties coming in across Africa
Author: Katrina Mabika is Tax Director: Advisory Services for BDO Zambia. Africas enormous potential as an economic growth hub can be realised by consolidating the regions economic integration and facilitating trade and labour mobility across the continent. Double taxation treaties are one of the ways to do this, enhancing our continents attractiveness as a trade destination and protecting the interests of African professionals, who often travel across the region for work.
MIRROR MIRROR ON THE WALL WHO HAS THE FAIREST TAX RATE OF THEM ALL?
Author: Roxanna Nyiri, National Head of Transfer Pricing and International Tax and Director BDO and Jolani Proxenos, International Tax & Transfer Pricing Consultant at BDO. Developing countries (or capital-importing countries) are making strong efforts to attract foreign investments. South Africa and Mauritius are seen as developing countries and have adopted tax incentive regimes to increase their attractiveness for Multinationals to set-up locally.
South Africa signs the Multilateral BEPS Convention
Author: Roxanna Nyiri, National Head of Transfer Pricing and International Tax and Director BDO Johannesburg. The OECDs base erosion and profit shifting (BEPS) has been at the forefront of international tax discussions over the last number of years. Multinationals are concerned with how they will be affected and how tax authorities will be applying BEPS regulations.
Country-by-country reporting: Co-operation is the name of the game
Author: Roxanna Nyiri, Director: Transfer Pricing at BDO Tax Services. The ramping-up of country-by-country (CbC) reporting to regulate transfer pricing and combat cross-border tax evasion, heralds a new global tax landscape. It makes for different demands by tax authorities worldwide and requires the provision of information at a much finer level of detail. As a result, the risks associated with transfer pricing rises significantly and companies need to strategically manage this new policy environment, especially given that the first CbC reports are required to be filed with SARS from 31 December 2017.
Increase of provisional tax estimates by SARS
Authors: Annalie Pinch and David Marais. In terms of paragraph 19(1)(b) of the Fourth Schedule to the Income Tax Act, 5, 1962 (the Fourth Schedule), every company that is a provisional taxpayer shall, during every period within which provisional tax is or may be payable by it as provided in terms of the Fourth Schedule, submit to the Commissioner of the South African Revenue Service (SARS), a return of an estimate of the total taxable income which will be derived by the company in respect of the year of assessment in respect of which provisional tax is or may be payable by the company.
SARS publishes draft notice to submit country-by-country, master file and local file returns
Author: Scott Salusbury. On 2 June 2017, the South African Revenue Service (SARS) published a draft public notice requiring the submission of country-by-country (CbC), master file and local file returns. This marks an important step towards the finalisation of South Africas transfer pricing documentation requirements. As a result of the work on the base erosion and profit shifting (BEPS) project, the Organization for Economic Cooperation and Developments Transfer Pricing Guidelines for Multinational Enterprises and Tax Authorities now include recommendations for a three-tiered approach to transfer pricing documentation (ie CbC report, master file and local file), which South Africa is in the process of implementing.
Refunds subject to set-off under the Tax Administration Act
Author: Robert Gad and Jo-Paula Roman. In order to create a more uniform system for the administration of taxes in South Africa, section 191 of the Tax Administration Act, 2011 (the TAA) has effectively replaced various refund and set-off provisions which appeared in respective tax acts. Section 191 of the TAA now provides that all tax debts that are due must be set-off against refunds, including the interest thereon, due by the South African Revenue Service (SARS) to that taxpayer.
The lawfulness of retrospective amendments in tax law
Author: Beric Croome. On 29 May 2017, Judge Fabricius delivered judgment in the Gauteng High Court in the case of Pienaar Brothers (Pty) Ltd vs Commissioner for the South African Revenue Service and the Minister of Finance, in a case dealing with the Taxation Laws Amendment Act, 2007 (the Amending Act) which inserted section 44(9A) into the Income Tax Act, 1962 (the Act). The taxpayer sought an order declaring that section 34(2) of the Amending Act is inconsistent with the Constitution, and invalid to the extent that it provides that section 44 (9A) of the Act shall be deemed to have come into operation on 21 February 2007 and to be applicable to any reduction or redemption of the share capital or share premium of a resultant in company, including the acquisition by that company of its shares in terms of section 85 of the Companies Act, on or after Read More …
SARS issues a further ruling on venture capital companies
Authors: Mansoor Parker and Anuschka Wischnewski. On 6 June 2017, the South African Revenue Service (SARS) issued binding private ruling 274 (BPR 274). BPR 274 deals with a venture capital company (VCC) investing in a company providing and expanding plants for the generation of solar electricity. This brings the number of binding private rulings that SARS has issued in respect of venture capital companies to four. Below, we compare the rulings in this matter with prior rulings issued by SARS to determine whether there are any trends with regard to rulings issued by SARS in respect of venture capital companies.