https://search.dev.ndltd.org/etd/cape-town/oai:open.uct.ac.za:11427/30808
type: CreativeWork
name: Seeking arm’s length: An evaluation of formulary apportionment and predetermined margins as alternative or supplementary methods to establish proxy arm’s length transfer prices for multinational intercompany transactions in South Africa
description: Since the inception of democracy in South Africa and the subsequent lifting of sanctions and trade embargos placed upon South Africa, the country’s economy has evolved from a much protected, inward looking economy into an internationally robust and competitive environment. Multinational enterprises (MNE’s) which seek to invest in a geographical region often choose certain countries as a base from which they can expand their investments to the other countries in the region. With its sizable economy, political stability relative to the rest of Africa and overall strength in financial services, South Africa should be the ideal location from which foreign investors can extend their investments into the rest of Africa (Ogutta, 2011). However, in South Africa foreign investment has reduced to an extent where local companies are now more invested in international markets than international investment in South Africa (Development, 2018). In monetary terms, at the end of 2017, South Africa had invested R3.3 trillion in foreign markets while foreign markets had only invested R 1.8 trillion in South Africa (Development, 2018). With the current global economic challenges, developing countries like South Africa have become increasingly aware of the importance of tax revenue and the effects of base erosion and profit shifting on the financial well-being of the state (OECD:G20 Working group, 2014); (Economic Commissions for Africa, 2018). Section 31 of the South African Income Tax Act, is the main section in the Act relating to transfer pricing in South Africa. Transfer pricing is one of the most important issues in international tax. It is estimated that more than 60% of international trade happens across borders but within the same corporate groups (Cobnam & Mcnair, n.d.). The transfer pricing rules of South Africa are closely aligned with the wording of the Organisation for Economic Cooperation and Development (OECD) and the United Nations (UN) Model Tax conventions and are in …
abstract: Since the inception of democracy in South Africa and the subsequent lifting of sanctions and trade embargos placed upon South Africa, the country’s economy has evolved from a much protected, inward looking economy into an internationally robust and competitive environment. Multinational enterprises (MNE’s) which seek to invest in a geographical region often choose certain countries as a base from which they can expand their investments to the other countries in the region. With its sizable economy, political stability relative to the rest of Africa and overall strength in financial services, South Africa should be the ideal location from which foreign investors can extend their investments into the rest of Africa (Ogutta, 2011). However, in South Africa foreign investment has reduced to an extent where local companies are now more invested in international markets than international investment in South Africa (Development, 2018). In monetary terms, at the end of 2017, South Africa had invested R3.3 trillion in foreign markets while foreign markets had only invested R 1.8 trillion in South Africa (Development, 2018). With the current global economic challenges, developing countries like South Africa have become increasingly aware of the importance of tax revenue and the effects of base erosion and profit shifting on the financial well-being of the state (OECD:G20 Working group, 2014); (Economic Commissions for Africa, 2018). Section 31 of the South African Income Tax Act, is the main section in the Act relating to transfer pricing in South Africa. Transfer pricing is one of the most important issues in international tax. It is estimated that more than 60% of international trade happens across borders but within the same corporate groups (Cobnam & Mcnair, n.d.). The transfer pricing rules of South Africa are closely aligned with the wording of the Organisation for Economic Cooperation and Development (OECD) and the United Nations (UN) Model Tax conventions and are in …
author: Raymond, Bonita
date published: 2019
date modified: 2026-07-22T22:22:46Z
provider: University of Cape Town
publisher: Networked Digital Library of Theses and Dissertations
type: WebPage
source organization: Department of Finance and Tax

PropertyValue
property ID: Handle
value: http://hdl.handle.net/11427/30808