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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Resolving the conflict between 'controlled foreign company' legislation and tax treaties: a South African perspective
Author:Oguttu, Annet WanyanaISNI
Year:2009
Periodical:The Comparative and International Law Journal of Southern Africa (ISSN 0010-4051)
Volume:42
Issue:1
Pages:73-114
Language:English
Geographic term:South Africa
Subjects:fiscal law
foreign enterprises
international agreements
Abstract:In order to prevent the avoidance of taxes that result from investing in offshore companies, countries often enact 'controlled foreign company' legislation which ensures that the undistributed income of a controlled foreign company is not deferred, but that it is taxed to its domestic shareholders on a current basis. However, the application of controlled foreign company legislation has been questioned on the basis that it contradicts some of the basic principles of double taxation treaties. In this article, the salient aspects of tax treaties that are considered to be incompatible with controlled foreign company legislation are discussed. From a South African perspective, it is feared that if a solution to this conflict is not found, South Africa may be faced with a litany of challenges to the applicability of its controlled foreign company legislation in specific treaty situations. The article discusses how other countries (United Kingdom, France, Finland) have addressed this problem and suggests recommendations for the reform of the South African law. Notes, ref., sum. [Journal abstract, edited]
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