Maximise returns with tax planning in South Africa

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    The president of South Africa (SA) and his Chinese counterpart, Xi Jinping, recently met to strengthen bilateral relations and create sustainable investment opportunities between the two countries. It comes as no surprise, as China is SA’s largest trading partner and both countries are members of the BRICS group of developing countries. China has invested extensively in the mining, infrastructure and construction industries of SA.

    Bernard_du_Plessis
    Bernard du Plessis

    In light of the relationship between the two countries, it is important for Chinese investors to take note of the investment opportunities available in SA, and to also ensure that investments are efficiently structured to optimise returns. Tax planning is an important aspect of the investment decision making process. Equally important is that the investor’s tax planning strategy not only be optimal and efficient for present purposes, but be sufficiently resilient to deal with rapidly changing international tax policies. Internationally, tax authorities are focusing more on issues concerning base erosion and profit shifting (BEPS) and anti-avoidance measures. The South African Revenue Service (SARS) is no exception, and is the regional leader and an aggressive role player on issues concerning BEPS on the African continent. Below are some issues that Chinese investors should take into consideration when deciding to invest into SA.

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    Bernard du Plessis is a tax executive at ENSafrica. He can be contacted on +27 83 458 2161 or by email at [email protected]

    Mathabo Magolego is a senior tax associate at ENSafrica. She can be contacted on +27 82 787 9990 or by email at [email protected]