A “memorandum of understanding” (MoU) involving the South African Revenue Service (SARS) and the Broad-Based Black Economic Empowerment (B-BBEE) Commission has implications from a B-BBEE compliance and a tax compliance perspective during its applicable period of three years.
Given this development, it appears that there could be greater SARS focus on taxpayers that have entered into B-BBEE transactions or that have agreed to arrangements that may affect a taxpayer’s B-BBEE rating. The MoU appears to reflect the tax authority’s intention for greater vigilance regarding empowerment transactions. Accordingly, it would be prudent for taxpayers to determine their compliance with the tax and empowerment rules before implementing any empowerment transactions or any arrangements that may affect BEE parties within taxpayer groups.
Read an August 2018 report [PDF 292 KB] prepared by the KPMG member firm in South Africa
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