IN 6 was issued by SARS on 30 June 2023 providing guidance on the interpretation and application of the term “place of effective management” in determining the tax residence of a company.
A person other than a natural person is a “resident” as defined in section 1(1) if such person –
- is incorporated, established or formed in South Africa, or
- has its place of effective management in South Africa.
The term “place of effective management” is not defined in the Act and must be ascribed its ordinary meaning, considering international precedent and interpretation. It does, however, not have a universally accepted meaning and various countries, including members of the OECD, continue to attach different meanings to it. Interpretation Note 6 aims to provide guidance in this regard.
For more information, consult IN 6 here.
