Author: Frank Mosupa (PwC) The judgment of the Western Cape Tax Court in ITC 1862 (2013) 75 SATC 34 concerns the general anti-avoidance provision contained in the now-repealed section 103 of the Income Tax Act 58 of 1962 (the “Income Tax Act”) as applied to the implementation of a particular employee share incentive scheme. The case concerned transactions entered into prior to the coming into force of the new general anti-avoidance rule on 2 November 2006 and now contained in Part IIA of the Income Tax Act.
Tag: GAAR
Taxation of Foreign Dividends
Author: Tarryn Spearman(Grant Thornton) Significant changes were introduced to the way foreign dividends, received by South African residents, are treated for tax purposes. The purpose of these changes is to eliminate the disparity between the tax treatment of domestic and foreign dividends.
Cyprus: A Further Step Towards Ratification Of The Cyprus – Spain Double Taxation Agreement
Authors: Andreas Neocleous & Co LLC The double taxation agreement between Cyprus and Spain, which was signed in Nicosia on 14 February 2013, has taken another step towards ratification. On 2 August the Spanish cabinet approved the agreement and forwarded it the Spanish parliament for consideration. The new agreement follows the OECD Model Convention
Krok heir faces R228m tax bill
Pretoria – Mark Krok, billionaire heir to an apartheid-era skin-lightening company, will be about R228m poorer if the SA Revenue Service (Sars) and the Australian Tax Office (ATO) have their way. The Sunday Times reported that Sars, on behalf of the ATO, is seeking an order to ring-fence Krok’s local assets – including a R37.5m mansion in Clifton, Cape Town, as well as vast chunks of pharmaceutical company Aspen and casino company Tsogo Sun. In 2006, Australia kicked off Operation Wickenby, targeting high-profile tax evaders – and their lawyers and accountants – who have set up shell companies and trusts in tax havens to evade the Australian tax office. Maxim Krok, Mark’s estranged half-brother, has also come under the spotlight. In 2010, the ATO unleashed investigators to scrutinise his tax records.
High Court Rejects Challenge of Exchange Control Ruling
Billionaire entrepreneur Mark Shuttleworth emigrated from the Republic in February 2001. Following his emigration, he made applications to transfer portions of his blocked funds from the Republic. In the second of these (in 2008) he was permitted to remit funds subject to a levy equal 10% of the amount remitted.
Status Overviews of International Treaties and Agreements Updated
Author: SARS Legal and Policy On the 7th of August 2013 SARS released updated overviews of various international treaties and agreements. To view the update on “Double taxation agreements & protocols” click here: To view the update on “Customs MAA’s” click here: To view the update on “Exchange of Information Programs” click here: To view the update on “One-Stop-Border-Post Agreements” click here:
Shuttleworth wins some, loses some in court
Billionaire entrepreneur Mark Shuttleworth’s bid to have South Africa’s entire exchange control system declared unconstitutional has failed. The North Gauteng High Court on Thursday dismissed Shuttleworth’s application to strike down the whole of section 9 of the Currency and Exchange Act and all of the Exchange Control Regulations as unconstitutional.
Binding private ruling on foreign asset-for-share transaction
On July 24 2013 the South African Revenue Service (SARS) released Binding Private Ruling 149, dealing with the disposal by a local company of foreign assets (shares) in exchange for shares in a foreign company. The applicant was a local company holding 100% of the issued shares in foreign Company A, which held the applicant’s various foreign investments.
Fiscal residence – new Mauritius DTA provision modifies the test for companies
Recent news articles on international tax have focused heavily on the use by multinational companies of tax-friendly regimes through which to hold investments and to transact business. Heads of industry have been summoned to appear before legislators to explain their companies’ tax structures and transactions. Much has been made in the course of these discussions of the use of benefits afforded under tax treaties to mitigate exposure to tax. It is perhaps significant that these issues did not raise their head when economies were booming, and one may be forgiven for observing that there is an air of desperation in economies whose tax revenues have suffered from the economic downturn of the past few years and which now cast about for scapegoats.
South Africa’s tax treaty with the DRC provides a new avenue for international investment
The tax treaty entered into between the Democratic Republic of Congo (DRC) and South Africa provides opportunity to promote South Africa as a hub for inward investment into the DRC. The tax treaty provides multinational companies with alternative investment opportunities in the DRC.