A foreign company is not automatically a PE in South Africa
June 08, 2011
Sophie Ashley - TPW
In a binding private ruling, the South African Revenue Service (SARS) has concluded that a non-resident company, whose effective management is not in South Africa, does not constitute a permanent establishment (PE).
The ruling, BPR 102, considers a proposed transaction on behalf of the taxpayer, who provides subordinated interest-bearing loans to companies incorporated in South Africa and then subscribes preference shares in the companies.
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