revised 2 ajm ms - renewables presentation mt...
TRANSCRIPT
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TAX ISSUES
17 September 2014
Titre de la présentation1
A focus on ownership
structures
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Date2 Titre de la présentation
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AGENDA
Tax and other considerations
1. South Africa
- (Re)structuring the SA Group
-Exit strategy
2. Cross-border
-Tax considerations for cross-border investments
- Funding
- Exchange control
- Transfer pricing
Date3 Titre de la présentation
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TAX AND OTHER CONSIDERATIONS
SOUTH AFRICA
Date4 Titre de la présentation
01
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Date5 Titre de la présentation
SA TAX AND OTHER CONSIDERATIONS
Re(structuring) the SA Group
� Advisable to have a single SA
Holdco
-Single point of entry (and exit)
-Offshore funding structure
simplified to one entity
� Organise other companies as
sub’s
-SPV HoldCo
-Construction Co (local content
requirement)
-Financing Co (?)
� Structure allows for
BEE/Community Trust at any
given level required
International
HoldCo
SA HoldCo
SPV HoldCoConstruction
CoFinancingCo
SPVSPVSPV’s
Trust
Bidding
rights
Capital/loan/
prefs
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Date6 Titre de la présentation
SA TAX AND OTHER CONSIDERATIONS
Re(structuring) the SA Group
� If correct structure not in place –
correction can quite potentially
be made subsequently
-SA tax neutral
-Foreign tax consequences TBC
International
HoldCo
Construction
CoFinancingCo
SPVSPVSPV’s
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Date7 Titre de la présentation
SA TAX AND OTHER CONSIDERATIONS
Exit strategy
� Single point of exit
- If International HoldCo disposes
of shares in SA Holdco (typically
tax free, but TBC)
- If at Operating Company level,
CGT to arise
-Consider carry interest and
shareholding dilution as
alternative to ‘straight sale’
International
HoldCo
SA HoldCo
SPV HoldCoConstruction
CoFinancingCo
SPVSPVSPV’s
Trust
Bidding
rights
Capital/loan/
prefs
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Date8 Titre de la présentation
02
TAX AND OTHER CONSIDERATIONS
CROSS-BORDER
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Date9 Titre de la présentation
Tax considerations for cross-border investments
� Funding
-Thin capitalisation
- Draft IN and EBITDA
- No safe harbour
-Hybrids
-WHTs and DTAs
-Limitation on excessive interest
� Exchange control
� Transfer pricing
-Debt
-Other related party fees
International
HoldCo
SA HoldCo
SPV HoldCoConstruction
CoFinancingCo
SPVSPVSPV’s
Trust
Bidding
rights
Capital/loan/
prefs
CROSS-BORDER TAX AND OTHER CONSIDERATIONS
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Date10 Titre de la présentation
Tax considerations for cross-border investments
� Special Economic Zones (SEZs)
-Tax rate 15% (vs. 28%)
-Building allowances 10% (new and
unused)
-Limitations on industries
International
HoldCo
SA HoldCo
SPV HoldCoConstruction
CoFinancingCo
SPVSPVSPV’s
Trust
Bidding
rights
Capital/loan/
prefs
CROSS-BORDER TAX AND OTHER CONSIDERATIONS
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Date11 Titre de la présentation
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Date12 Titre de la présentation
Questions
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DateTitre de la présentation13
Mazars is present in 5 continents.
CONTACT
Mazars South Africa
Mazars House
Rialto Road
Grand Moorings Precinct
Century City
7441
Tel. +27 (0) 21 818 5000
Fax +27 (0) 21 818 5001