After widespread criticism and various comments and submissions to National Treasury/SARS, it has been proposed, in terms of the 2014 Draft Tax Laws Amendment Bill, that South Africa’s transfer pricing legislation relating to Secondary Adjustments, be amended once again. Secondary adjustment The term Secondary Adjustment is explained as follows in the Organisation for Economic Co-operation and development’s Transfer Pricing Guidelines:
Category: International Tax
Recent exchange control developments in relation to "domestic treasury management companies"
During 2013, a treasury management company regime was introduced for exchange control purposes to encourage the establishment of group treasury management functions in South Africa and to further enhance South Africa’s position as a “gateway into Africa”.
OECD moves forward on BEPS Action Plan
The Organization for Economic Cooperation and Development (“OECD”) recently held its annual tax conference in Washington, DC focusing on the progress of implementation of its Action Plan on Base Erosion and Profit Shifting (the “BEPS Action Plan”).
The political correctness of tax myths
Is South Africa being fairly compared? JOHANNESBURG – There is a perception that South Africa has a low tax to gross domestic product (GDP) ratio. A recent article stated that South Africa has an average tax rate of 25%, which ranks us at number 130 in the world.
SA Reserve Bank amends exchange control rules
South Africa’s exchange control rules require that a South African resident wishing to assign intellectual property to a foreign entity must obtain prior approval from the South African Reserve Bank. The Reserve Bank’s Financial Surveillance Department has recently issued a circular amending the exchange control rules. The amendment relaxes the exchange control rules, to a limited extent, to allow unlisted South African companies to list on stock exchanges located offshore and raise foreign loans and capital more easily.
Tax exemption on foreign employment income
In terms of current practice, remuneration derived from services rendered outside of South Africa is, subject to certain requirements, exempt from normal tax in South Africa in terms of s10(1)(o)(ii) of the Income Tax Act, No 58 of 1962 (Act).
African continent is complex and challenging to regulate tax legislation, according to PwC VAT guide
Africa, with its 54 countries, presents a complex and challenging environment to administer tax legislation. “Africa’s rapidly growing economy, complex consumer tax needs and increasingly complex tax regimes means that managing the tax burden for multinationals is a daunting task” says Charles de Wet, PwC Head of Indirect Tax for Africa. “Businesses entering African markets are faced with imprecise challenges of having to adapt to the various countries’ tax regulations. They can even suffer harsh consequences if they are not ‘Africa ready’,” says de Wet.
International Tax – Bilateral assistance in tax matters
High net worth individuals and their associated trusts have in the past been identified by the South African Revenue Service (SARS) as posing a risk of non-compliance to tax legislation. The recent confirmation of a preservation order by the North Gauteng High Court in C: SARS v Krok and Jucool Enterprises Inc. (Case No. 1319/13) now renews the focus of SARS in this regard.
International Tax – OECD – Common Reporting Standard
On 13 February 2014, the Organisation for Economic Co-operation and Development (OECD) released a common reporting standard (CRS) document, which seeks to establish automatic exchange of tax information as the new global standard for governments.
International tax transparency: the need for automatic exchange of information
In recent years, the international tax environment has seen an increase in the global drive towards greater financial transparency and the automatic exchange of financial information, which replaces the earlier standard of information exchange on request.