- Title
- A comparative study between the Seychelles and Singapore as a tax haven for the incorporation of a foreign structure of a resident company
- Creator
- Wagener, Petrus Johannes Crous
- Subject
- Tax havens
- Subject
- Banks and banking, Foreign -- Taxation -- Seychelles
- Subject
- Banks and banking, Foreign -- Taxation -- Singapore
- Subject
- Taxation -- Seychelles
- Subject
- Taxation -- Singapore
- Date Issued
- 2017
- Date
- 2017
- Type
- Thesis
- Type
- Masters
- Type
- MCom
- Identifier
- http://hdl.handle.net/10948/21208
- Identifier
- vital:29456
- Description
- Companies in South Africa will generally attempt to reduce their tax burden, and over the last ten years the use of Singapore and the Seychelles as tax haven jurisdictions’ have increased significantly. Singapore and the Seychelles are well known for their low or zero tax rates and for their confidentiality policies in respect of providing information to foreign tax authorities. It is because of these policies that individuals and businesses invest huge amounts in these countries. There is however uncertainty as to what type of foreign structure a resident company in South Africa may incorporate in the above-mentioned tax haven jurisdictions in order to receive the most effective tax benefit. The aim of this treatise was to identify the different foreign structures in Singapore and the Seychelles which a South African resident company may incorporate. Resulting from this research certain issues have been identified relating to the type of foreign structure and a major one is summarised below: The concept of “place of effective management” used to determine tax residence or as the tie-break clause concept under a double tax agreement. As stated in the case of Oceanic Trust Co Ltd NO v C: SARS (2012) 74 SATC 1275 which is in line with foreign precedents, the test is one of substance over form and the approach to determine “place of effective management” may be to attribute human characteristics to a structure to establish where it is effectively managed. Thus, South African companies can make use of Singapore or the Seychelles as tax havens and incorporate a foreign structure which will be seen as not being resident in South Africa to distribute passive income sources out of South Africa, without paying taxes in the country (withholding taxes may be levied in the tax havens). This should be of concern from the point of view of the South African government. Another issue noted in this treatise related to the use of offshore trusts as a foreign structure for a South African resident company may be the more effective option seeing that the controlled foreign company legislation is not applicable on offshore trusts, reducing the risk of taxation on foreign income of a South African resident company when it is held in an offshore trust. The above issues that have been identified present opportunities to South African resident companies to take advantage of the current tax legislation. It is further recommended that resident companies need to consider the South African domestic tax law implications, respective double tax agreements with both Singapore and the Seychelles as well as the domestic tax laws of these tax haven jurisdictions when planning on incorporating a foreign structure.
- Format
- ix, 81 leaves
- Format
- Publisher
- Nelson Mandela University
- Publisher
- Faculty of Business and Economic Sciences
- Language
- English
- Rights
- Nelson Mandela University
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