Browsing by Author "Motsatsi, Boitumelo Agatha"

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    The South African Headquarter Company Regime: A critical examination
    (University of the Witwatersrand, Johannesburg, 2023) Motsatsi, Boitumelo Agatha; Kolitz, Maeve
    National Treasury, through the ‘Explanatory memorandum on the taxation laws amendment bill of 2010’ stated that: South Africa’s location, its sizable economy, political stability, strength in financial services as well as the many treaties the country held with many countries across the globe, made it a natural holding company gateway into Africa (National Treasury, 2010a: p.77), (Lourens, 2019: p.30). The South African government realised that funds which were received from foreign locations could not be channelled through the country to other foreign locations without explicit exchange control approval. In an effort to enhance its attractiveness as a viable and effective location from which businesses could extend their African operations the government reviewed its tax rules and proposed measures that would provide relief from foreign exchange control and tax. (National Treasury, 2010: p.78). Section 9I of the South African Income Tax Act 58 of 1962 (the Act) was inserted in the Act with effect from years of assessment commencing on or after 1 January 2011 (Taxation Laws Amendment Act, 2010: s 6(1)(o)). The purpose of this report is to examine how problems with the South African headquarter company regime taxation rules in s 9I (Crowley, 2020) can be resolved in an effort to make South Africa’s headquarter company regime more attractive to foreign investors. The report will firstly identify the foreign investors that South Africa wants to target through the headquarter company regime in s9I. Secondly, the headquarter company regime taxation rules in s 9I will be analysed in detail. Thirdly, weaknesses in the headquarter company taxation rules will be identified and thereafter, the researcher will identify the remedies which can be applied to the aforementioned weaknesses in order to make the headquarter company regime more attractive to foreign investors (Lourens, 2019: p.25). The critical examination has led the researcher to conclude that redefining the tax policies of South Africa’s headquarter company regime in s 9I through the application of the proposed remedies to the weaknesses found in the above- mentioned regime taxation rules, may boost South Africa’s appeal as a preferred location for foreign investors to establish their headquarter companies