ARTICLE · 24 AUGUST 2020

When The Going Gets Tough: Four Points To Consider During A SARS Transfer Pricing Audit

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Earlier this year, Glencore Investments Ltd (the head of the Australian "consolidated tax group") successfully defended an AUD92.7-million (about ZAR1.15-billion) transfer pricing tax bill in the...

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Andries Myburgh

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Earlier this year, Glencore Investments Ltd (the head of the Australian "consolidated tax group") successfully defended an AUD92.7-million (about ZAR1.15-billion) transfer pricing tax bill in the Federal Court of Australia. The Australian Tax Office ("ATO") had argued that certain sales of copper concentrate by a group company to its Swiss parent were not concluded at arm's length, which resulted in an understatement of the Australian entity's taxable income. The court disagreed, penning a landmark transfer pricing judgment in the process.

Back at home, the South African Revenue Service ("SARS") has seemingly been measured in tackling profit shifting and base erosion. This is evident from the dearth of reported cases on transfer pricing. But the time might be ripe for sharper focus: South Africa has now fully implemented master file, local file, and country-by-country requirements for certain taxpayers, and SARS has made noteworthy strides in bolstering its

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