3. Electronic Theses and Dissertations (ETDs) - All submissions

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    An analysis of the taxation effects and considerations for multinational entities with dual residency issues, from a South African perspective
    (2016-01-29) Weideman, Nicolette
    There has been significant advances in the international arena with regards to global economic growth and trade, as well as enormous competition by countries to attract inward foreign direct investment from multinational enterprises (MNEs) to ensure the sustainability of their own economies. Fundamentally the contentious issue is the possibility of double taxation (DT), due to the dual residency of the MNE. The MNE operates in various markets which results in cross-border transactions, whether physical or electronic, and this ultimately means that different tax jurisdictions will become applicable and enforceable by each relevant country. These dual resident MNEs could be seen as a tax resident in both countries and thus be liable for tax obligations in both of these countries. This would therefore lead to the same income incurring DT or double non-taxation (DNT), which would have a devastating impact on that MNE. This lead to the establishment of double taxation treaties, agreements and conventions (DTA’s), between various countries which are aimed at addressing this imbalance. As technology advances at an alarming rate, so too does the possibility of abuse of tax treaties. Two important criteria are ‘the place of effective management’ (POEM) and the ‘permanent establishment’ (PE), which are critical to the determination of the correct tax jurisdiction where the dual resident MNE will incur various tax liabilities. These concepts, POEM and PE, can be confusing but are imperative, in order to prevent DT, and which could prejudice the relevant fiscus, as well as an attempt to avoid any conflict between the taxing regimes. An interesting facet of the POEM and PE conundrum is the interpretation by the Organisation for Economic Co-operation and Development’s (’the OECD’) Model Tax Convention (MTC) compared to the interpretations by the South African Revenue Service (SARS). Another area of contention for MNEs is the current enormous global focus on the concept of Base Erosion and Profit Shifting (BEPS), which is under great scrutiny, and is of great concern for the majority of revenue authorities. These authorities are intensifying their focus on improving and enforcing anti-avoidance provisions to prevent taxation leakage in their respective tax jurisdictions. This shift in priorities opposes one of a MNE’s main business objectives which is to maximize profits, by either diverting, extracting and/or distributing profits out of a high tax paying jurisdiction into a lower tax paying jurisdiction. This will consequently create an additional business risk which emphasises the need for international tax expertise. The international tax expert is a valuable business team member, as their knowledge and expertise is imperative for the mitigation of possible tax risks, correct interpretation and application of the relevant tax legislation on the business flows of the MNEs as a result of operational expansion or any cross-border transactions or activities. Key Words: Taxation, Tax Treaties, Agreements, BEPS, Conventions; Cross-border, Double Taxation; Dual Residency; International tax, Multinational enterprises; Permanent Establishment, Place of Effective Management; OECD Model Tax Convention; Tax Intelligence, Tax Jurisdictions
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    Entrepreneurial orientation and internationalisation of multinational enterprises : a focus on firm performance in emerging markets.
    (2012-10-17) De Haaff, Dean Nicholas
    This research offers an insightful view of Entrepreneurial Orientation (EO), its relation to Internationalisation and Performance of Multinational Enterprises (MNEs) in three Emerging Markets; China, Malaysia and South Africa. 21 MNEs are reviewed, seven from each emerging market, over the research timeframe of 2005 to 2010. The issue at hand revolves around a thorough review of the internationalisation modes of the selected MNEs into various regions around the world and measuring their performance variables. The internationalisation modes were analysed against MNE EO, and the relation between their EO and their internationalisation. The method of the data collection utilised was mixed, obtaining all results from published MNE annual reports over the period of review and utilised both qualitative and quantitative data analysis in the research. Qualitative data was thematically analysed and coded for quantitative statistical analysis, whilst the financial data was statistically analysed accordingly. EO is highly interlinked with MNE internationalisation, as the very least on a construct level. EO strategies have shown support in correlating with MNE performance measures, but have differed between the emerging markets reviewed. It has shown that MNE focus with regard to EO strategy and internationalisation differs, with varying effects on their success. This is an area of academic research that has received very little, if any, review prior to this research. It offers bountiful opportunities to build on, and insightful findings that may be further reviewed.
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