Problems relating to Trade and Investment on South Africa
14. Taxation Systems |
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Issue |
Issue details |
Requests |
Reference |
| (1) Nebulous Contents and Enforcement Period of the New Taxation System | - The contents and due enforcement date for new legislation and its amendment are promulgated, out of the blue, on taxation and, rules and regulations (relating to CO2 tax, tyre tax, exhaust emission standard, and safety standard etc.). Moreover, their implementing due dates are frequently postponed. It makes difficult to forecast impacts on the vehicles manufacture/sales business. It materially impacts the plans for local production, and the import quantity from overseas, including Japan. | - It is requested that GOSA collects industries' views in the process of evaluating the contents and the implementation schedule, when planning environment related taxation system and legislation, which by themselves are not of problems to the industries in concern. (For example, preferential measures for environment friendly vehicles, etc.) | |
| (2) Non-refundable STC | - Secondary Tax on Company (STC) levy is 10% on the dividend paid to the investor (parent). However, its refund in the investor's country is not possible, STC being levied upon SA legal entity. | - It is requested that GOJ request GOSA to change the withholding tax refundable in Japan. | - SA Income Tax Act, Section 64 b.&c. |
| (3) Parent-Sub-Sidiary Loan Disabled by Nebulous Definition of Thin Capitalisation | - For avoidance of the group fund outflow, member firm desires to make parent-subsidiary loan. However, due to ambiguity of the criteria for thin capitalisation (determined by transfer price taxation system), its execution remains pending. | - It is requested that GSA takes step to set forth precise definition of the thin capialisation into legislation. | - Income Tax Act No.58 of 1962 |
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