Electronic Theses and Dissertations (Masters)

Permanent URI for this collectionhttps://hdl.handle.net/10539/37781

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    The Tax Residency of a Legal Person During the World Health Pandemic
    (University of the Witwatersrand, Johannesburg, 2022-06-30) Mhlongo, Nomsa Patience; Zijl, Wayne van; Cerbone, Dannielle
    It is common for directors to travel from their home jurisdiction to another jurisdiction to attend board meetings. At these Board meetings, the company’s tactical and operational decisions are made, resulting in the latter jurisdiction being the Place of Effective Management. Due to the Covid-19 pandemic, there is a lack of certainty t regarding the possible changes in the Place of Effective Management of a company due to the incapacity of the board members or senior executives to travel abroad given stringent travel restrictions. Numerous countries around the world have reacted to the Covid-19 pandemic with exceptional lockdowns, extremely limiting economic activity and the personal movement of their citizens. The concern may affect the company’s residence under domestic laws and influence the company’s tax jurisdictions. It is not out of the ordinary for foreign companies to have one or more board members who reside in South Africa, particularly if the foreign companies are subsidiaries of a group headquartered in South Africa. In case SARS were to require the eye that managerial decisions taken in South Africa during the lockdown by a CEO or other Board members of a foreign company have caused the foreign company to become a South African tax resident, at that point it be at risk of being taxed here as well as in the country where it is normally tax resident.
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    The principles governing 'place of effective management' and 'permanent establishments' and their application to the digit al economy: a South African perspective
    (2016) Boel, Katherine
    The purpose of this research report is to consider the application of existing 'place of effective management' (POEM) and 'permanent establishment' (PE) principles to a company operating in a digital economy in order to determine its appropriateness and limitations. This paper is broadly divided into four parts. The first part of the paper provides a brief background to the above taidng principles and the digital economy. The second part considers, in detail, the guidance and factors that are currently available on how the POEM and the creation of a PE for a company may be determined both internationally and from a South African tax perspective, including the role of the residency tie-breaker article and the PE article in most double taxation agreements (DTA's) with South Africa. The third part of the paper considers how these guidelines and factors may apply to the digital economy and the practical challenges which arise. Finally, the paper seeks to identify possible alternatives to overcome the pitfalls in the POEM and PE interpretations and to highlight aspects which require further consideration.