The OECD led Base Erosion and Profit Shifting (BEPS) Project is aimed at updating corporate tax systems around the world to reduce the tax minimisation opportunities created by the global economy. If the Project is successful, all countries will be required to make significant changes to their domestic tax law and treaty networks with the aim of ensuring that multi-national businesses are paying their “fair share” of the income tax burden.
Category: GAAR
New OECD recommendations may affect not-for-profit organizations
Over the past few years, the issue of “tax avoidance” has dominated agendas at both Canadian and international tax conferences. The issue has also received considerable news coverage as a result of the actions of certain large companies with complicated tax structures that were seen not to be paying their fair share of taxes. Many countries, including Canada, have been waiting to receive guidance on how to deal with this and other issues from the Organization for Economic Co-operation and Development (OECD), the premier supranational organization that helps governments implement international tax principles.
Transfer pricing – changes to secondary adjustments
By Christel du Preez, Senior Tax Manager Grant Thornton Johannesburg The proposed amendment The Draft Taxation Laws Amendment Bill 2014 proposes a revision of transfer pricing compliance in in the form of a deemed dividend, from 1 January 2015. It proposes that in future, the Section 31 secondary adjustment be deemed a dividend in specie, to be paid by the South African taxpayer to its foreign connected person.
Global tax transparency – I can see clearly now – or can I?
There has been an abundance of press coverage on the subject of FATCA and numerous practitioners have offered helpful insights into the technicalities and operation of the new reporting rules. FATCA marked a pivotal start to some very serious moves on global tax transparency that are continuing apace. We now have the CRS (Common Reporting Standard) coming hazily into view and this subject of global tax transparency seems to be impressing on my day-to-day life given the global reach of my firm.
OECD releases 2014 BEPS deliverables
Author: Osler Hoskin & Harcourt LLP , Canada, Global On September 16, 2014, the Organisation for Economic Co-operation and Development (OECD) released its first seven of 15 deliverables under the OECD/G20 base erosion and profit shifting (BEPS) project (the 2014 BEPS Package). The 2014 BEPS Package arises from the Action Plan on Base Erosion and Profit Shifting (the BEPS Action Plan), which contains 15 specific recommendations for international tax reform (see our Update on the BEPS Action Plan, “OECD/G20 International Tax Reform: Potential Impact on Canadian Companies,” July 19, 2013). A summary overview of the 15 recommendations is included at the end of this Update.
Collection and exchange of tax related information by tax authorities
Tax authorities across the globe are working aggressively to collect taxes which they believe are collectable in their respective jurisdictions. States are entering into bilateral and multilateral agreements aimed at assisting each other in the collection of information and taxes. South Africa has actively taken part and in some respects been a regional leader in issues relating to the gathering of information and sharing thereof with other states to
Contentious international corporate restructuring ruling
Author: Andrew Lewis (Cliffe Dekker Hofmeyr) The corporate tax rollover relief provisions contained in section 41 to section 47 of the Income Tax Act, No 58 of 1962 (Act) were recently expanded to cater for international corporate restructurings. The South African Revenue Service (SARS) released Binding Private Ruling 178 (BPR 178) on 14 August 2014 where the applicant sought clarity on the tax consequences of an international corporate restructuring in terms of section 42 (asset-for-share transactions) and s45 (intra-group transactions).
Proposed changes to reportable arrangements
The concept of reportable arrangements was introduced in 2005 to require early disclosure to the South African Revenue Service (SARS) of certain types of transaction that may give rise to tax avoidance concerns so as to enable SARS to investigate them timeously. Fewer than 150 transactions were reported by 2008, causing significant amendments to the reportable arrangement legislation to ensure a greater response. The draft Taxation Laws Amendment Bill of 2014, published in July for public comment, contains several proposed changes to the reportable arrangement legislation. Some of the main proposals are:
Challenges for corporate taxpayers and the role of advisors
Author: Pieter van der Zwan (North-West University) Being a corporate taxpayer in an environment with constant developments in legislation and regulations coupled with complex tax issues that arise on a regular basis is not an easy task. One need not look further than a number of cases that appeared before the courts over the past year to see evidence of this. It is submitted that the nature of the challenges faced highlights the fact that the role of a corporate tax advisor’s involvement in the tax affairs of a client has evolved to be much more than merely assisting to complete an income tax or provisional tax return just before the submission deadline arrives. This article deals with four of the challenges that a corporate taxpayer in South Africa may face as well as the role that a corporate tax advisor could, and arguably should, be fulfilling in addressing these Read More …
South Africa leading the pack towards global information exchange
On 9 June 2014, the South African Revenue Service (SARS) announced that South Africa and the United States (US) had entered into an inter-governmental agreement (IGA) which facilitates the implementation of the US Foreign Account Tax Compliance Act (FATCA), and signifies an important step in South Africa’s journey in a global movement towards the automatic exchange of information for tax purposes. The so-called “Model 1A” agreement has not yet been ratified by Parliament. However, Public Notices confirming its implementation have been gazetted.