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Pension funds and BEPS

South Africa

Taxand South Africa investigates whether the current international tax focus on base erosion and profit shifting (BEPS) is relevant for tax-exempt pension funds.

In particular, should the trustees and/or administrators of pension funds take note of the finalisation by the Organisation for Economic Co-operation and Development (OECD) of the 15 point action plan to address BEPS?  

Both of these questions should be answered “yes” by South African pension funds that invest outside of the country. More specifically, the OECD’s Report on Action 6 entitled “Preventing the Granting of Treaty Benefits in Inappropriate Circumstances” (Action 6) and the public discussion draft entitled “Treaty Residence of Pension Funds” which was released in February 2016 (Discussion Draft) are relevant for pension funds.

Although Action 6 identifies treaty abuse as one of the most important BEPS concerns and it recommends certain treaty anti-abuse provisions in order to, inter alia, address instances which result in double non-taxation, Action 6 and the Discussion Draft contain good news for tax-exempt pension funds.  

Discover more: Pension funds and BEPs


Your Taxand contacts for further queries are:
Bernard Du Plessis
T. +27 21 410 2500
E. bduplessis@ENSafrica.com

Magda Snyckers
T. +27 83 289 3885                                 
E. msnyckers@ENSafrica.com

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Taxand's Take

Although Action 6 identifies treaty abuse as one of the most important BEPS concerns and it recommends certain treaty anti-abuse provisions in order to, inter alia, address instances which result in double non-taxation, Action 6 and the Discussion Draft contain good news for tax-exempt pension funds.

Taxand's Take Author

Bernard Du Plessis
Taxand Board member
South Africa
Sub-Saharan Africa

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