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We provide a wealth of publications by PwC South Africa providing informed commentary on current developments in the tax arena, both locally and internationally.

Through analysis and comment on new law and judicial decisions of interest, they assist business executives to identify developments and trends in tax law and revenue practice that might impact their business.

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Tax Alert - South Africa publishes draft Pillar Two legislation

In South Africa’s 2024 Budget Speech (22 February 2024), the Finance Minister announced the implementation of the Global Minimum Tax regime, commonly known as the Pillar Two rules, for South Africa.

Draft legislation published on the same day proposes two taxes, namely the income inclusion rule (‘IIR’) top-up tax, and the domestic minimum top-up tax (‘DMTT’), applying to fiscal years commencing on or after 1 January 2024. These rules will apply to multinational enterprise groups with a consolidated group turnover of at least EUR 750 million (approximately ZAR 15 billion).

It is expected that the legislation will be finalised and enacted following a process of public consultation, subject to any amendments arising from the public consultation process. South Africa’s National Treasury has invited submissions on the draft legislation and also welcomes continued engagement with stakeholders. Comments are due by 31 March 2024.

The following are key aspects of the draft legislation:

  1. The IIR appears to have been adopted in line with the Model Rules, with no key exceptions.
  2. The undertaxed profits rule (‘UTPR’) will not apply, although it could be introduced at a later stage.
  3. The DMTT applies according to the Model Rules, with certain specific measures included.

 

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Chimwemwe Kainja

Chimwemwe Kainja

Senior Manager, PwC South Africa

Tel: +27 (0) 11 797 5812

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