Many South African residents want to make use of tax planning options to minimize their South African tax consequences. Proper structuring is necessary to ensure that the most efficient options are made use of. If not, taxpayers might be
faced with problems and unexpected tax consequences in future. Structuring should not only take the current tax savings and benefits into account when structuring, but also the future tax that could arise in subsequent periods. A holistic and long-term perspective is important in choosing the best tax planning option.
The second webinar in this series of three webinars will be taking place on 3 June 2020. The webinar will focus on the process of setting up an active trading, consulting or IP exploitation business (or an extension of an existing South African business) outside of South Africa. The issues that will be covered in this webinar are:
The importance of a commercial main objective in dealing with the South African General Anti-Avoidance Rules
Using a “building blocks” approach in starting a legal structure, balancing cost and practicalities with the tax benefits and risks
The importance and practical challenges of ensuring that the “Place of Effective Management” of the business occurs outside of South Africa
Dealing with Controlled Foreign Company rules
The critical issue of creating foreign based substance and value added activity and the application of transfer pricing rules
Ensuring that no “Permanent Establishment” of the foreign business exists in South Africa
The role and benefits of Double Taxation Agreements and the effect of the Multi-Lateral Initiative, using Mauritius as an example
Some important South African Exchange control restrictions and rules, particularly regarding the exportation of capital from South Africa
Interest expenses and interest income are line items for almost all taxpayers. It is however also a section that creates serious confusion. When are we required to charge interest? Can SARS force us into it? What is the difference between
deemed and actual interest and how does this impact taxable income?
Join Carmen Westermeyer in this session that will unpack the following key questions:
What are the common law requirements and rules with respect to debt and charging interest?
Can charging/not charging interest give rise to donations tax?
What is s24J and how do we calculate interest for income tax purposes?
How can SARS penalize us for charging interest?
o Section 8F and 8FA
o Disallowance of interest deductions
How can SARS penalize us for not charging interest?
The Brummeria principle
What transfer pricing principles should be considered?
Delegates will have an understanding of and exposure to the following:
Understanding the legal requirements with respect to interest
Understanding how to calculate the interest amount per s24J
Understanding the anti-avoidance provisions in the Income Tax Act tie in