ARTICLE · 21 AUGUST 2015

Revised Draft Interpretation Note Regarding "Place Of Effective Management"

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Earlier this year, the South African Revenue Service ("SARS") released issue 2 of Interpretation Note 6 ("draft Interpretation Note") on the "place of effective management".

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Chris De Bruyn

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Earlier this year, the South African Revenue Service ("SARS") released issue 2 of Interpretation Note 6 ("draft Interpretation Note") on the "place of effective management" ("POEM"). Comments were due by 31 July 2015. POEM is often of critical importance in determining the tax residency of an entity.

The interpretation previously put forward by SARS in terms of Interpretation Note 6 issued during 2002 ("IN6") in this regard, did not accord entirely with international precedent and the approach followed by SARS was that the POEM is:

the place where the company is managed on a regular or day-to-day basis by directors or senior managers of the company, irrespective of where the overriding control is exercised or where the board meets; and

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