Abstract
M.Comm.
At some stage in the development of multi-national organisations, the need
for a company to raise adequate finance for the group and use the group's
retained earnings in the most efficient way may well arise. In order to raise
adequate finance tax efficiently, careful consideration should be given to,
inter alia, income tax consequences pertinent to different jurisdictions
considered as a possible locus for a finance company.
Since South Africa's emergence into the modern day commercial village,
many foreign investors were either re-introduced or introduced to South
Africa as a place of business or potential business. Also, South African
businesses started to expand more rapidly across the country's borders.
Assuming, as the optimist would, that what has been experienced is only
the start of greater things to come, the need for the development of
international tax planning techniques and/or the identification of planning
opportunities in the context of group finance companies is imperative.
Naturally, such techniques can only be developed subsequent to analysing
the tax systems of the home jurisdiction of potential major investors (for
instance the United States of America) and/or of jurisdictions which
traditionally represented planning opportunities from a South African
perspective (for instance the Netherlands) and/or of jurisdictions that may
become relevant from a planning perspective as a result of South Africa's
transition or some other reason such as differences in tax systems opening
up the opportunity for tax arbitrage (for instance Mauritius or Ireland,
respectively). However, since the first and second of the above categories
have been explored amply up until the current point in time there is no
need to take them into account in yet another study.