CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Pending Tax Reform Creating Uncertainty For SA Firms

Pending Tax Reform Creating Uncertainty For SA Firms

by Robert Lee, Tax-News.com, London

04 July 2003


A South African tax expert has suggested that proposed reforms to international tax legislation will create uncertainty, and increase the compliance burdens on the South African Revenue Service, multinational businesses and taxpayers with plans to invest abroad.

At present dividend income received from certain designated countries is exempt from taxation in South Africa, provided that the shareholder has a 10% stake in the overseas company. However, Sean Kruger, a tax director at Ernst and Young, suggested that government plans to abolish tax on South African companies that hold a "meaningful interest" in foreign subsidiaries are far from clear, and argued that until legislation hits the statute book, domestic firms will be unable to plan their affairs effectively.

"Companies need every bit of competitive advantage they can get; certainty of a company's tax burden is a critical part of that," Krueger told Business Day, adding that uncertainty over tax costs will hamper companies' plans to bid for contracts, as it could affect future profits.

There also appears to be a certain amount of ambiguity surrounding the definition of 'meaningful interest' according to Michael Butler, an international tax manager at PricewaterhouseCoopers. Domestic firms paying dividends to controlled foreign companies are exempt from tax provided their interest in the controlled firms is at least 25%. "It is hoped that the meaningful interest is 25%" Mr Butler noted.


To see today's news, click here.

 















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »