Strategizing International Tax Best Practices – by Keith Brockman

S. Africa has introduced a change in its legislation for 2015 addressing “secondary adjustments.”  The legislation aims to revert to a “deemed dividend”  concept of classification from the current “constructive loan” methodology.  A link explaining the legislation, in addition to the OECD definition of a “secondary adjustment” is provided for reference:

Prior to final settlement of any audit, the effect of a “secondary adjustment” as well as a “corresponding adjustment” in another jurisdiction should be known to preserve appeal rights for that audit while avoiding double taxation.  This knowledge should be comprehended and utilized as an effective audit tool by internal tax and legal colleagues, in addition to external advisors ( who may not have multinational audit defense experience).


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