n SA Mercantile Law Journal = SA Tydskrif vir Handelsreg - Curbing tax avoidance - investments in offshore 'protected cell companies and cell trusts' : the American and British approach - what is South Africa's view?

Volume 23, Issue 1
  • ISSN : 1015-0099
  • E-ISSN: 1996-2185



In order to minimise their global tax exposure, taxpayers active in international trade often get involved in tax-avoidance schemes. The ensuing fiscal advantages are often achieved when investments are made in low-tax or tax-haven jurisdictions. Most of the tax-planning schemes used to avoid taxes, employ some kind of company or trust structure. One such structure that appears relatively new on the offshore-investment market, and whose characteristics and diverse use baffle many tax authorities, is the 'protected cell company' (the 'PCC'). This structure can sometimes be in a trust form - 'protected cell trusts', commonly referred to as unit trusts. In 2009, the Tax Justice NetWork, released a report in which it noted that investments in PCCs contributed to the global financial crisis that begun in 2007.

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