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Click to edit Master subtitle style

Click to edit Master subtitle style. Doing business in Angola South African considerations*. PwC. *connectedthinking. Topics for discussion. Methods of doing business Limited presence Branch of SA company Incorporated subsidiary Funding alternatives Equity Loans

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Click to edit Master subtitle style

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  1. Click to edit Master subtitle style Doing business in AngolaSouth African considerations* PwC *connectedthinking

  2. Topics for discussion • Methods of doing business • Limited presence • Branch of SA company • Incorporated subsidiary • Funding alternatives • Equity • Loans • Withholding tax planning • Other considerations • Exchange control • Employees / individuals • Value Added Tax • Custom duties

  3. Methods of doing business Limited presence • Scenarios • Trading with customers / clients in Angola • No formal presence • Temporary employee • Agency contract • Commercial concession contract • SA world-wide basis of taxation • Foreign tax credits • Exchange control

  4. Methods of doing business Branch of SA company • World-wide basis of taxation • Set off of foreign profits against local losses • Head office cost allocation • Transfer pricing • Exchange control • Foreign tax credits • SA sourced income • Angola tax rate 35% • No WHT on profit repatration

  5. Methods of doing business South African subsidiary • SA resident? • Effective management • Register as SA taxpayer • SA tax on world-wide income • Controlled foreign company • >50% of participation rights held by SA residents • Business establishment • Diversionary transactions • Passive income • Intra-group passive income • IT10 form

  6. Methods of doing business South African subsidiary (continued) • Exchange control • Transfer pricing • Profit repatriation • Management fees & interest • Foreign tax credits • Foreign dividends • >25% equity shareholding • 10% withholding tax

  7. Funding alternatives

  8. Payments subject to withholding tax Dividends 10% Interest 15% Royalties (also equipment rental) 10% Management / service fees No double tax treaties Splitting of goods and services (local & foreign) Domestic SA tax credits Source of income Proof of payment Withholding tax planning

  9. Other considerations Exchange control All foreign exchange transactions - Authorised dealers - Timing of cash payments Foreign investment - SARB approval - Investment limits Repatration of foreign dividends

  10. Other considerations Employees / individuals • Residence • Ordinarily resident • Dual resident • Relief for double taxation • Section 6quat • Section 10(1)(o) • CGT exit charge • SA employees’ tax • Temporary absence • Branch of SA company • Subsidiary of SA company

  11. Other considerations Indirect taxes: Value Added Tax • Export of goods • Direct exports • Indirect exports • Services • Rendered in SA • Rendered in Angola • Presence of recipient in SA • Documentation requirements • Branch of SA company • Subsidiary of SA company

  12. Other considerations Custom duties • Export documentation • Export value • Export tariffs • Border crossings • Moving goods in transit

  13. Conclusion Comprehensive research & planning Local & foreign perspective Obtain professional advice

  14. Questions

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