n Professional Accountant - An international comparative study of South African-controlled foreign company legislation insights - : industry insights

Volume 2016, Issue 27
  • ISSN : 1680-7537


Historically, tax policies were formulated principally to deal with domestic economic and social concerns (OECD, 1998:13). While the domestic tax systems of essentially closed economies also had an international dimension - a limited form of the residence basis of taxation - in respect of the amount of tax that was to be levied on certain foreign-sourced income of domestic residents and including the taxation of locally-sourced income of non-residents, "the interaction of domestic tax systems [was] relatively [minimal], given the limited mobility of capital" (1998:13). But the situation changed in recent decades as a consequence of the accelerating globalisation of trade and investment, fundamentally altering the relationships among domestic tax systems, requiring countries to continually assess "their tax systems and public expenditures with a view to making adjustments where appropriate [so as] to improve the 'fiscal climate' for investment" (1998:13).

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