National treasury is shaking up its corporate tax laws, embarking on a new “Gateway into Africa” initiative to make SA a more attractive destination for foreign companies wanting to do business in Africa to base their regional headquarters in SA. The reform — part of the tax amendment bill and which takes effect in January next year — introduces a new headquarter company regime, separate from the current controlled foreign company regulations which subject foreign companies’ subsidiaries in SA to local taxes.
The regime will enable profits and interest earned in other countries to flow tax-free through a foreign company’s SA office to its home country. This should enhance SA’s chances of being in the top league of world destinations in which to set up shop.
