The relevance of the OECD BEPS action plan 2 recommnedations for selected aspects of cross border arbitrage through selected hybrid instruments and entity arrangements in South African Income Tax Law

dc.contributor.advisorWest, Craigen_ZA
dc.contributor.advisorRoeleveld, Jenniferen_ZA
dc.contributor.authorMcCann, Patrick Josephen_ZA
dc.date.accessioned2016-02-02T14:44:17Z
dc.date.available2016-02-02T14:44:17Z
dc.date.issued2015en_ZA
dc.descriptionIncludes bibliographical referencesen_ZA
dc.description.abstractThe OECD made certain recommendations in its 2014 discussion draft, "Neutralising the Effects of Hybrid Mismatch Arrangements", comprising recommendations on domestic law and double tax convention measures. This dissertation assesses the potential implication of these recommendations for South Africa's tax laws and double tax conventions as these relate to cross border financing arrangements between two taxpayers using hybrid instruments or hybrid entities. These hybrid entities and mismatches and which give rise to mismatch outcomes either through a deduction arising in either jurisdictions or a deduction arising in one jurisdiction without an inclusion in income in the other jurisdiction. This assessment is made to understand how these recommendations could impact on South Africa's tax laws and double tax conventions. This impact is assessed by determining the publically expressed sentiment of the South African government towards the OECD's base erosion and profit shifting proposals and thereafter by assessing how the above noted recommendations may interact with the Income Tax Act and South Africa's double tax conventions to address mismatches within the scope of this dissertation. This interactions is assessed by: reviewing the treatment of cross border hybrid instrument and hybrid entity arrangements in the Income Tax Act, the withholding tax measures in the Income Tax Act, the treatment of these arrangements in double tax conventions concluded by South Africa, and the interaction of the recommendations in the above OECD report with the Income Tax Act and double tax conventions concluded by South Africa. Conclusions are then drawn from this analysis. The review of publically expressed sentiments of the South African government evidenced support for the OECD's base erosion and profit shifting proposals but also a sensitivity to South Africa's tax sovereignty. The review of the treatment in the Income Tax Act of the arrangements within the scope of this dissertation found that at times the Income Tax Act potentially did not resolve the mismatches of concern and that withholding tax may not have the potential to comprehensively preserve the tax base against these arrangements, particularly taking into account the influence of double tax conventions. The review of the recommendations in the above OECD report found that these recommendations could assist existing domestic tax law measures in addressing the mismatch outcomes of concern, albeit not necessarily comprehensively and potentially at the cost of added complexity. It was also found that the double tax convention recommendations appeared to have limited impact to clarifying and confirming the existing treatment of arrangements involving hybrid entities. These findings are significant as they indicate a support for the OECD's recommendations by the South African government and that the recommendations could assist in addressing the mismatch outcomes addressed in this dissertation.en_ZA
dc.identifier.apacitationMcCann, P. J. (2015). <i>The relevance of the OECD BEPS action plan 2 recommnedations for selected aspects of cross border arbitrage through selected hybrid instruments and entity arrangements in South African Income Tax Law</i>. (Thesis). University of Cape Town ,Faculty of Commerce ,Department of Finance and Tax. Retrieved from http://hdl.handle.net/11427/16705en_ZA
dc.identifier.chicagocitationMcCann, Patrick Joseph. <i>"The relevance of the OECD BEPS action plan 2 recommnedations for selected aspects of cross border arbitrage through selected hybrid instruments and entity arrangements in South African Income Tax Law."</i> Thesis., University of Cape Town ,Faculty of Commerce ,Department of Finance and Tax, 2015. http://hdl.handle.net/11427/16705en_ZA
dc.identifier.citationMcCann, P. 2015. The relevance of the OECD BEPS action plan 2 recommnedations for selected aspects of cross border arbitrage through selected hybrid instruments and entity arrangements in South African Income Tax Law. University of Cape Town.en_ZA
dc.identifier.ris TY - Thesis / Dissertation AU - McCann, Patrick Joseph AB - The OECD made certain recommendations in its 2014 discussion draft, "Neutralising the Effects of Hybrid Mismatch Arrangements", comprising recommendations on domestic law and double tax convention measures. This dissertation assesses the potential implication of these recommendations for South Africa's tax laws and double tax conventions as these relate to cross border financing arrangements between two taxpayers using hybrid instruments or hybrid entities. These hybrid entities and mismatches and which give rise to mismatch outcomes either through a deduction arising in either jurisdictions or a deduction arising in one jurisdiction without an inclusion in income in the other jurisdiction. This assessment is made to understand how these recommendations could impact on South Africa's tax laws and double tax conventions. This impact is assessed by determining the publically expressed sentiment of the South African government towards the OECD's base erosion and profit shifting proposals and thereafter by assessing how the above noted recommendations may interact with the Income Tax Act and South Africa's double tax conventions to address mismatches within the scope of this dissertation. This interactions is assessed by: reviewing the treatment of cross border hybrid instrument and hybrid entity arrangements in the Income Tax Act, the withholding tax measures in the Income Tax Act, the treatment of these arrangements in double tax conventions concluded by South Africa, and the interaction of the recommendations in the above OECD report with the Income Tax Act and double tax conventions concluded by South Africa. Conclusions are then drawn from this analysis. The review of publically expressed sentiments of the South African government evidenced support for the OECD's base erosion and profit shifting proposals but also a sensitivity to South Africa's tax sovereignty. The review of the treatment in the Income Tax Act of the arrangements within the scope of this dissertation found that at times the Income Tax Act potentially did not resolve the mismatches of concern and that withholding tax may not have the potential to comprehensively preserve the tax base against these arrangements, particularly taking into account the influence of double tax conventions. The review of the recommendations in the above OECD report found that these recommendations could assist existing domestic tax law measures in addressing the mismatch outcomes of concern, albeit not necessarily comprehensively and potentially at the cost of added complexity. It was also found that the double tax convention recommendations appeared to have limited impact to clarifying and confirming the existing treatment of arrangements involving hybrid entities. These findings are significant as they indicate a support for the OECD's recommendations by the South African government and that the recommendations could assist in addressing the mismatch outcomes addressed in this dissertation. DA - 2015 DB - OpenUCT DP - University of Cape Town LK - https://open.uct.ac.za PB - University of Cape Town PY - 2015 T1 - The relevance of the OECD BEPS action plan 2 recommnedations for selected aspects of cross border arbitrage through selected hybrid instruments and entity arrangements in South African Income Tax Law TI - The relevance of the OECD BEPS action plan 2 recommnedations for selected aspects of cross border arbitrage through selected hybrid instruments and entity arrangements in South African Income Tax Law UR - http://hdl.handle.net/11427/16705 ER - en_ZA
dc.identifier.urihttp://hdl.handle.net/11427/16705
dc.identifier.vancouvercitationMcCann PJ. The relevance of the OECD BEPS action plan 2 recommnedations for selected aspects of cross border arbitrage through selected hybrid instruments and entity arrangements in South African Income Tax Law. [Thesis]. University of Cape Town ,Faculty of Commerce ,Department of Finance and Tax, 2015 [cited yyyy month dd]. Available from: http://hdl.handle.net/11427/16705en_ZA
dc.language.isoengen_ZA
dc.publisher.departmentDepartment of Finance and Taxen_ZA
dc.publisher.facultyFaculty of Commerceen_ZA
dc.publisher.institutionUniversity of Cape Town
dc.subject.otherInternational Taxen_ZA
dc.titleThe relevance of the OECD BEPS action plan 2 recommnedations for selected aspects of cross border arbitrage through selected hybrid instruments and entity arrangements in South African Income Tax Lawen_ZA
dc.typeMaster Thesis
dc.type.qualificationlevelMasters
dc.type.qualificationnameMComen_ZA
uct.type.filetypeText
uct.type.filetypeImage
uct.type.publicationResearchen_ZA
uct.type.resourceThesisen_ZA
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