Net closing in on offshore companies and trusts
EU’s new economic substance requirements legislation targets tax transparency, fair taxation and compliance with anti-base erosion and profit shifting measures
Many high-net-worth South Africans with offshore assets make use of offshore companies, trusts or other entities to house their assets. They are likely now to be forced to review their offshore structures, including even the most standard ones, in light of a new rising tide in the form of the so-called EU economic substance requirements, which were translated into legislation with effect from January 1. In 2016 the EU finance ministers instructed the EU code of conduct group to undertake a screening process whereby non-EU jurisdictions, 92 in total, were assessed in respect of tax transparency, fair taxation and compliance with anti-base erosion and profit shifting measures. Guernsey, Jersey, the Isle of Man, British Virgin Islands , Cayman, Bermuda and Vanuatu were found not to have a formal tax legal substance requirement for entities doing business in or through the respective jurisdictions and were put on an EU “grey list”. These jurisdictions all committed to adopting “economic...
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