Professional fees paid to a South African entity

Professional fees paid to a South African entity

Tax Alert

Professional Fees

This alert brings to your attention the Tax Appeal Tribunal’s (TAT) judgment in the case of McKinsey & Company Inc. Africa Proprietary Ltd (Appellant) v Commissioner of Legal Services and Board Coordination, Appeal No. 199 of 2020.

The Appellant, a limited liability company incorporated in South Africa operates a registered branch in Kenya whose principal activity is the provision of consultancy services including strategy, operations, financial and human resource consulting.

The Respondent carried out an audit on the Appellant’s affairs for the years 2014 to 2018 and issued an assessment on 31 October 2019 demanding additional withholding tax on professional fees the Appellant paid to a related entity resident in South Africa.

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