S.Africa: South Africa Revenue Service Issues Guidelines on Determining Place of Effective Management

The South African Revenue Service (SARS) Nov. 3 issued an interpretation note providing guidance on determining the place of effective management of a company for tax residency purposes. The note explained that a company’s place of effective management refers to the place where key management and commercial decisions necessary for the conduct of its business as a whole are regularly and predominantly made or the headquarters location of a company, unless its structure is decentralized. SARS stated that a company may have more than one place of management, but not more than one place of effective management at a time. The note acknowledged that a definitive rule for place of management cannot be put forward and the issue must be examined on a case-by-case basis where the test is one of substance over form. [South Africa, South African Revenue Service, 11/03/15]