Open AccessTAXATION OF HOLDING COMPANIES IN THE NETHERLANDS: A SOUTH AFRICAN OBSERVATION
Author(s) -
Thabo Legwaila
Publication year - 2021
Publication title -
obiter (port elizabeth. online)/obiter (port elizabeth)
Language(s) - English
Resource type - Journals
eISSN - 2709-555X
pISSN - 1682-5853
DOI - 10.17159/obiter.v33i1.12174
Subject(s) - order (exchange) , government (linguistics) , business , investment (military) , control (management) , foreign direct investment , gateway (web page) , finance , market economy , accounting , economics , law , political science , management , linguistics , philosophy , politics , world wide web , computer science , macroeconomics
The South African government has expressed an intention to market itself as a gateway to investment in Africa. This will be achieved inter alia by redesigning certain aspects of the tax laws in order to encourage investment into South Africa in the form of headquarter companies as a special kind of holding companies. The Netherlands has over time adjusted its tax regime to achieve the same goal, viz, to attract holding companies for investment into European countries and globally. Specifically, the Dutch participation exemption and the advance-tax ruling system have been hailed as the key tax instruments that are instrumental in attracting foreign residents to setup holding companies in the Netherlands. Furthermore, the intentional absence of various tax instruments such as controlled foreign-company provisions and exchange-control regulations further enhance the Netherlands’ suitability to host holding companies. In light of the South African government’s intentions to attract holding companies, it is important to study the Dutch system applicable to holding companies to see what attributes, if any, South Africa could also adopt.