South Africa resolves disputes with large institutions
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

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

South Africa resolves disputes with large institutions

The South African Revenue Service (SARS) expects to receive R3billion ($435million) after settling disputes with major institutions.

The disputes centre on cross-border transactions that the SARS considered to be unacceptable tax avoidance that eroded the South African tax base. The institutions claim to have acted in good faith.

The issue concerns transactions that aim to use tax treaties or relief measures in domestic law to generate tax benefits.

The benefits usually come from the tax relief claimed in excess of any economic double taxation that has occurred on post-tax dividends or interest income.

The tax benefits are usually shared between the institution and its foreign company through the pricings of transactions. These transactions typically lead to a financial loss for the institution in the absence of tax benefits.

Though for confidentiality reasons, the tax authorities did not reveal the names of the taxpayers, the SARS press release referred to structured finance litigation in New Zealand where four banks - BNZ, Westpac, ASB Bank and ANZ National - agreed a settlement of more than NZ$2.2 billion ($1.65 billion) with the Inland Revenue Department.

This suggests that the taxpayers in the settlements in South Africa were also from the financial sector.

more across site & bottom lb ros

More from across our site

The Senate report into PwC’s scandal is titled ‘The cover up worsens the crime’
Law firms that are conscious of their role in society are more likely to win work, according to a survey of over 23,000 in-house professionals
The firm’s tax business generated a quarter of HLB’s overall revenues in 2023
While successful pillar two implementation will require collaboration across all units, a combination of internal and external tax advice is at the centre of the effort
Binance has also been accused of manipulating foreign exchange rates via currency speculation and rate-fixing
Six individuals should have raised questions over information they received but did not breach professional standards, according to the firm
The partnership of KPMG UK has installed Holt for a second term as CEO and senior partner; in other news, a Baker McKenzie partner has sued the IRS
HSBC has settled a claim originally worth £240m relating to a failed film tax relief scheme without admitting liability or wrongdoing
Their prediction comes after the IRS announced it would send compliance letters to large foreign companies emphasising their US tax obligations
The ex-client is also suing the entire EY Australia partnership
Gift this article