Tax Risk: Controlled Foreign Company Taxation
Overview
A controlled foreign company (CFC) is a foreign company in which South African residents directly or indirectly hold more than 50% of the participation rights or more than 50% of the voting rights in that foreign company.
Certain anti-avoidance rules were introduced into our legislation to prevent taxpayers from shifting their capital to low tax jurisdictions.
Our session aims to provide you with a practical overview of the South African CFC taxation regime. You will be able to identify a controlled foreign company and understand the potential tax impact. The session will also cover the application of primary exemptions to controlled foreign company taxation and recent case law developments on the topic.
Video content
- What is a CFC?
- What are the implications of being a CFC?
- Understand what is CFC “net income”
- The primary exemptions
- “High-tax” exemption
- FBE exemption
- Coronation judgement and impact on FBE exemption
- CFC “exit taxes”
Competencies developed in this video
- You will be able to identify a CFC.
- Apply CFC exemptions.
- Understand CFC “exit taxation".