South Africa: 2013 budget

International Tax Review is part of Legal Benchmarking Limited, 1-2 Paris Garden, London, SE1 8ND

Copyright © Legal Benchmarking Limited and its affiliated companies 2026

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement


South Africa: 2013 budget

dachs.jpg

Peter Dachs

The 2013 budget which was released on February 27 2013 included various interesting proposals in relation to cross border transactions. It is proposed that the taxation relating to trusts in South Africa will be amended. As part of this process it is proposed that distributions from offshore foundations will be treated as ordinary revenue in the hands of South African residents. It is stated that "this amendment targets schemes designed to shield income from global taxation".

Furthermore it is proposed that a South African incorporated holding company may be set up by a listed entity to hold African and offshore operations. This entity will not be subject to any exchange control rules. The idea is to incentivise companies to manage their African and offshore operations from South Africa.

It is also proposed that further refinements will be made to the international headquarter company rules. The international headquarter company regime was introduced in 2010 to encourage international companies to invest in Africa using South Africa as a base. International headquarter company status will now be allowed for companies with shares and debt listed on the Johannesburg Stock Exchange. The participation threshold will also be reduced to 10%.

The Exchange Control Circular No 5/2013 released in conjunction with the budget states that during 2012, intellectual property transfers were deemed to be transfers of capital for exchange control purposes. The circular points out that this was a temporary measure and a joint National Treasury, Reserve Bank and South African Revenue Service panel will review this arrangement with a view to aligning intellectual property transfers with the relevant tax treatment.

Peter Dachs (pdachs@ens.co.za)
ENS Taxand

Tel: +27 21 410 2500

Fax: +27 21 410 2555

Website: www.ens.co.za

more across site & shared bottom lb ros

More from across our site

The future chief tax officer will be judged not only on compliance, but on their ability to harness data, technology and AI to support strategic decision-making
More than 200 tier promotions reshaped this year's European rankings as several international firms strengthened their positions in key tax markets
Ryosuke Takemura, OECD policy adviser, argued that the organisation’s role is ‘not to solve these issues one by one’
Awards
ITR is delighted to reveal all the shortlisted nominees for the 2026 Asia-Pacific Tax Awards
Monica Erasmus-Koen and her Taxtimbre team will be responsible for building the firm’s TP capability in the competitive Netherlands market
Howden’s Rian Bahia explains how tax insurance can address known risks, unlock transactions and offer an alternative route through disputes and uncertainty
Haynes Boone’s new London partner, Alexandra Ueno-Park, argues that one-size-fits-all policies, billable-hour targets and outdated networking expectations can hold talent back
Death, taxes and Deloitte hoovering up trophies at an ITR awards night. Isn’t that the saying?
AI, pillar two and joint audits could define the next era of tax controversy, says Baker McKenzie tax partner Ariane Calloud
Gregor McMillan of Howden explains how insurance-backed financing can help businesses and funds unlock liquidity from tax receivables and other contingent claims
Gift this article