The Organization for Economic Cooperation and Development (OECD) issued a 15 point action plan on base erosion and profit shifting (BEPS). The plan aims to “effectively prevent double non-taxation” and to ensure that low tax jurisdictions will not be able to continue with practices that “artificially segregate taxable income from the activities that generate it”. It seems that the action plan of the OECD will have a huge impact on worldwide transfer pricing and these actions must be carefully considered as it may have a major impact on how multinational groups operate.
Tag: International Tax
Transfer Pricing – Income Tax Act 58 of 1962 Section 31 further analysis
The provisions of Section 31 of the Income Tax Act No. 58 1962 (the Act) have been revised. Section 31 was introduced in 1995 to grant the Commissioner power to adjust tax calculations where a taxpayer was involved in cross-border transactions not at arm’s length. The old section 31 provided that the Commissioner could adjust the consideration in respect of the transaction to reflect an arm’s length price for the goods or services. This meant that taxpayers were not obliged to make the adjustments on their tax returns for transactions even if such transactions were not conducted on an arm’s length basis. Taxpayers could therefore file tax returns with excessive deductions, and then sit and wait and hope for the best – which would be that the Commissioner did not pick up these excessive deductions.
SA Shines In Global Tax Rankings
South Africa is one of only 18 countries that comply fully with international standards on the transparency and exchange of taxpayers information, the Treasury said in a statement on Wednesday. The exchange of tax information on request refers to when one tax authority seeks financial information from its counterpart. It relates to both individual and corporate taxpayers, according to the Global Forum on Transparency and Exchange of Information for Tax Purposes.South Africa outperformed countries like the United Kingdom, United States, Qatar and Mauritius.
Tax Adminstration Act No 28 of 2011 – Tax Litigation
Tax litigators will now have to consider, inter alia, the impact of certain provisions under the Tax Administration Act No. 28 of 2011 (the TAA) as amended by the Tax Administration Laws Amendment Act No. 21 of 2012 on the doctrine of legal professional privilege and a recent judgment reflecting the view of a court with regards to the adherence to the rules of the Tax Court by the South African Revenue Service (SARS).
International Tax – Mutual Assistance between South Africa and UK DTA
In the recent case of Ben Nevis (Holdings) Limited & Metlika Trading Limited v The Commissioners for HMRC (Her Majesty’s Revenue and Customs) [2013] EWCA, the Court of Appeal of England and Wales considered the interpretation of the mutual assistance provisions in the double tax agreement (DTA) between the United Kingdom (UK) and South Africa (SA).
Binding Ruling – BPR 143 – Headquarter company
Binding Private Ruling 143, dated 2 May 2013, issued in terms of section 76Q of the Income Tax Act No. 58 of 1962 (the Act), deals with whether certain preference shares held by the applicant (a public company incorporated and resident in South Africa) qualify as equity shares in the context of the definition of headquarter company in section 1 of the Act.
Reform R&D Tax Systems To Boost Innovation And Help Young Firms, Says OECD
Author: OECD Most OECD governments use tax incentives to encourage businesses to invest in research and development (R&D) to boost innovation and drive economic growth. Others, like China, India and South Africa, are doing the same. But reforming these incentives would give countries a better return on their investment and support young innovative firms that play a crucial role in job creation, according to a new OECD report.
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
SA’s Double Tax Agreement with Mauritius Amended
SA’s Double Tax Agreement with Mauritius Amended Author: Bernard du Plessis (ENS) The double tax agreement between Mauritius and South Africa, which came into force in 1997 has been renegotiated. There are three main amendments to the 1997 double tax agreement: the resident article has been amended, the allocation of taxing rights in relation to immovable property assets has been renegotiated, and the interest article has been amended.