Strategizing Multinational Tax Risks

The revenue authorities from South Africa, Botswana, Lesotho, Mozambique, Namibia, Swaziland and Zambia shared their thoughts and insights at a Best Practice tax meeting in Pretoria, South Africa on 16 July, 2015.

The Joint Statement of the Commissioners is attached for reference:

Click to access Joint%20statement%20of%20the%20Comissioners%20General%20and%20heads%20of%20delegation%20-%20%20Illicit%20Financial%20Flows%20meeting%20-%2016%20July%202015.pdf

Key considerations:

• Closer cooperation is needed re: illicit financial flows for tax and customs purposes.
• The country-by-country (CbC) reporting threshold set by the OECD may need to be less for the African sub-region.
• Information re: aggressive tax and duty schemes will be shared with existing treaty provisions.
• Collaborative efforts will ensure to counter direct and indirect tax fraud.
• Measures should be adopted to mitigate negative effects of profit shifting.
• Legal frameworks and collaboration efforts will improve.
• A regional database is to be established to support a risk-based approach.
• Treaty networking will be emphasized, including the African Tax Administration Forum (ATAF) Agreement on Mutual Assistance in Tax Matters (AMATM).
• South Africa will host a technical transfer pricing meeting, as well as convene the next meeting by October 2015.

Regional tax authorities in the African region, and others around the world, are working closer together to formulate Best Practices and join efforts to mitigate base erosion and profit shifting activities.

This collaboration also provides multinational organizations an opportunity to review their proactive efforts with tax authorities around the world to form trusting relationships and win-win opportunities to achieve mutual benefits.