Introduction
IFA activities
Lecture programme
Scientific Committee
International research
Tax thesis competition - South Africa
Tax thesis competition - International
International congresses
National reporters for the annual IFA Congresses
IFA publications

The South African Fiscal Association (SAFA) is the South African branch of the International Fiscal Association (IFA). IFA, in turn, was established in 1938 with its headquarters in the Netherlands. It is the only international non-governmental and non-sectoral organisation dealing with fiscal matters.

More details on IFA are given below.

As noted, the International Fiscal Association (IFA) was established in 1938 with its headquarters in the Netherlands. It is the only non-governmental and non-sectoral international organisation dealing with fiscal matters.

Its objects are the study and advancement of international and comparative law in regard to public finance, specifically international and comparative fiscal law and the financial and economic aspects of taxation.

IFA seeks to achieve these objects through its annual Congresses and the scientific publications relating thereto as well as through scientific research. Although the operations of the IFA are essentially scientific in character, the subjects selected take account of current fiscal developments and changes in national legislation.

Membership of IFA now (in 2003) stands at more than 10 000 from 85 countries. National Branches have been established in 47 countries. In addition, there are many direct members in countries where there is as yet no National Branch.

Along with the increasing internationalisation of the world's economies, international tax issues have become more numerous and of greater importance. Since the end of the second World War IFA has played an essential role both in the development of certain principles of international taxation and in providing possible solutions to problems arising in their practical implementation. It has been able to do so because its membership consists of high level representatives from both the private and the public sectors, including the Courts, Universities and international governmental and non-governmental organizations and because the Association has maintained over the years high standards in its debates and conclusions. Thus IFA has offered the necessary forum to experts belonging to different sectors of society, where opinions on topics of international taxation can be exchanged with respect for each other's background and responsibilities.

IFA has consultative status with the United Nations Economic and Social Council. In that capacity, it is represented at meetings of the Ad Hoc Group of Experts on International Cooperation in Tax Matters.

IFA also maintains close contact with the fiscal activities of the EU, the CIAT, the ICC, the OECD and various other organizations, including its Sister Organisation, the International Bureau of Fiscal Documentation

SAFA has long conducted a tax lecture programme.

The lectures are held at the offices of KPMG, in Parktown, Johannesburg and at the offices of PricewaterhouseCoopers, Century City in Cape Town.

The next lecture to be held in August 2003, the topic is Transfer Pricing in a South African context. See the “What’s New”.

The Scientific Committee of SAFA is currently involved in a range of activities, some under the auspices of IFA's Permanent Scientific Committee, and others at its own initiative. These activities involve:

• Writing and compiling an annual “Tax Technical Snaglist” aimed at SARS and National Treasury.
• Writing and compiling an annual “Tax Policy Snaglist” aimed at SARS and National Treasury.
• Selecting authors for the annual National Reports for the Cahiers.
• Dealing with technical queries from IFA.
• Reviving and moderating the entries for an annual tax thesis competition.

In 1997 IFA launched a Research Project on The impact of technological and financial innovation on the taxation of income and activities, in which SAFA assisted. The first segment analyses the impact of the communication revolution (computers, the Internet, satellite systems, and universally available telephone and fax services) on traditional source taxation concepts, such as the permanent establishment provisions of the OECD Model Convention and withholding tax rules. A second segment will address issues relating to innovative financial instruments.

These studies are being conducted by leading international tax experts, under the general supervision of IFA's Permanent Scientific Committee. The Committee on Fiscal Affairs of the OECD will be consulted, but the Committee will separately be preparing its own analyses.

The Scientific Committee launched a tax thesis competition in 1991, to supplement IFA's international competition, discussed below.

Past winners of the competition are:

1991 - Riël Franzsen - Transfer Duties (Open competition)
1992 - Hennie Coetzee - Capital Gains Tax (Open competition)
1993 - Paul Henderson - Environmental protection incentives (Masters category)
1993 - Rayanne Gecelter - Retirement planning (Honours/HDip category)
1994 - Lynette Theron - Agricultural land tax (Doctoral category)
1994 - Lawrence Kallmeyer - Incentives for foreign investment (Honours/HDip category)
1994 - Lawrence Kallmeyer - Incentives for foreign investment (Honours/HDip category)
1995 - Gilliam Fourie - Acquisitions and disposals (Masters category)
1995 - Kerry-Lee Hurst & Ilan Stermer - Group taxation (Honours category).

During this period, the tax thesis competition was generously supported by its sponsors, Absa Bank, Ernst & Young, Sentrachem Ltd and Hofmeyr Inc.

The tax thesis competition has not been held since 1996, but will be revived in the near future.

The Scientific Committee of SAFA encourages South African students to submit fiscal academic studies to IFA, to contend for the Mitchell B Carroll Prize.

This Prize has been instituted by IFA, in order to encourage scientific work, as a tribute to its Honorary President, Mitchell B Carroll. This Prize is awarded for a work dealing with international fiscal questions, comparative fiscal law or national fiscal law with the emphasis on the relationships with the fiscal law of foreign countries. Competition for the Prize is open to lawyers, accountants and economists. There is an age limit of 35. Detailed rules of entry appear below.

Winners since 1990 are

• 1990 - Ms Outi Elisabeth Raitasuo (Finland)
  "Tax sparing provisions in double taxation agreements between developed and developing countries"
• 1991- Dr Yves Noel (Switzerland)
  "La double imposition internationale résultant des redressements comptables entre sociétés apparantées et son élimination"
• 1992 - Dr Irene J J Burgers (Netherlands)
  "Taxation and supervision of branches of international banks"
• 1993 - Dr Franz Hacker (Germany)
  "Die Doppelbesteuerungsabkommen Russlands und der anderen GUS-Staaten"
• 1994 - Dr Michel de Wolf (Belgium)
  "Souveraineté fiscale et marché intérieur dans la jurisprudence de la Cour de Justice des Communautés Européennes et de la Cour Supreme des Etats-Unis"
• 1995 - Dr Klaus Grossmann (Germany)
  "Dual residence finance companies in international tax law, with special emphasis on Germany-USA"
• 1996 - Dr Peter A Harris (Australia)
  "International aspects of the imputation form of corporate tax systems"
• 1997 - Dr Achim Pross (Germany):
  "Swap, Zins und Derivat", Finanzinnovationen im nationalen und internationalen Steuerrecht unter besonderer Berücksichtigung des Zinsbegriffs
• 1998 - Dr. Ramon Jeffery (Australia):
  "The changing global economy: the role of sovereignty and jurisdiction in the creation and elimination of distortions to trade associated with international taxation"
• 1999: Dr. Claus Staringer (Austria):
  "Besteuerung doppelt ansässiger Kapitalgesellschaften"
• 2000: Dr. Marjaana Helminen (Finland):
  "The dividend concept in international tax law - dividend payments between corporate entities"
• 2001: Dr. Mario Züger (Austria):
  "Schiedsverfahren für Doppelbesteuerungs-abkommen"
• 2002: Prof. Dr. María Amparo Grau Ruiz (Spain):
  "International cooperation for the recovery of tax claims: the mutual assistance procedure"

Rules of the competition are

• The Prize shall be awarded for a typewritten or printed paper devoted to international fiscal law, comparative tax law, or national tax law having an important relation with fiscal law in foreign countries.
• Persons under 35 years of age on the 31st of July of the year in which they send in a paper may compete whether they are members of the Association or not.
  The paper must not have been published more than 2 years previously, and if it is a thesis for a doctor's degree the defence of it must not have taken place more than 2 years previously, this period being counted from the 1st of January of the year of publication or defence of thesis. Only individual papers bearing the name of the author may be submitted to compete for the Prize. Papers submitted by several authors are excluded.
• Papers may be entered by the authors themselves, but the National Branches of IFA or even individual members, domiciled in countries where a National Branch does not exist, may submit papers not directly submitted by its author.
• The Jury will only accept original work making either a theoretical or a practical contribution to the study of the effects of taxation, whether it concerns international taxation or comparative tax law.
• Only papers written in one of the three official languages of IFA (English, French and German) will be accepted.
• There is no restriction on the number of pages of the paper. The choice of subjects is unlimited.
• The Jury will consist of five members, who are appointed by the Executive Committee from amongst the IFA membership upon recommendation by the Permanent Scientific Committee.
• The winner will receive a medal and an invitation to attend the Congress during which the Prize is awarded, as well as an amount of Euro 2,500. Upon application a contribution towards travel expenses will be granted. IFA Congresses are held as a rule in September/October.
• The Jury's decision shall be made known at least two months before the appropriate Congress.
• Papers entered for the Prize for a given year should be submitted with eight copies on or before the 1st of April.

Address of the Jury
General Secretariat of IFA - E-mail: n.gensecr@ifa.nl

An annual Congress, hosted by one of IFA's National Branches and reserved to members only, provides an opportunity for an exchange of knowledge and experience with respect to fiscal law. These Congresses attract some 1000-1500 participants plus their accompanying persons. They afford scope for useful contacts with leading experts in the fiscal field, both as part of the official programme and in the course of private discussions.
Two subjects are selected each year by the Permanent Scientific Committee. These subjects form the basis of exhaustive discussions, normally resulting in some sort of concluding statement or recommendation.
The Cahiers de Droit Fiscal International contain National and General Reports on these subjects.

The Congress programme is supplemented by a choice of seminars, covering more technical subjects, whether international in character or focussed on the law of the country where the Congress is being held. The subjects and materials are available to members only and may be accessed through the secure are of the IFA Website.

The most recent Congresses have been held in the following cities:

1990 - Stockholm, Sweden
1991 - Barcelona, Spain
1992 - Cancun, Mexico
1993 - Florence, Italy
1994 - Toronto, Canada
1995 - Cannes, France
1996 - Geneva, Switzerland
1997 - New Delhi, India
1998 - London
1999 - Eilat
2000 - Munich
2001 - San Francisco
2002 - Oslo Congress
2003 - Syney
2004 - Vienna

SUBJECTS OF THE CONGRESS

Subject 1
Trends in company / shareholder taxation: single or double taxation?
The Panel will examine the on-going efforts by governments to keep their company shareholder tax systems competitive with other countries and (where relevant) compliant with international and EC law. In particular the demise of imputation in several countries and its replacement with shareholder relief systems of various kinds will be discussed, as well as the recent US proposal to abolish its long standing classical system. In addition to the treatment of dividends, the Panel will consider the extent to which the treatment of capital gains on shares in an international setting is now being viewed as part of the company shareholder tax issue.

General Reporter: Prof. Richard J. Vann (Australia)
Chair of the Plenary Session: Malcolm Gammie QC (United Kingdom)

Break-out Session A
Tax planning to avoid international double taxation of dividends
This program will examine various tax planning techniques, which effectively have been implemented and resulted in avoiding or substantially mitigating international double taxation of corporate profits to the external investor. Some of these techniques affect the financial structure of the issuing company or group of companies. In this respect cross-border repurchase transactions will be examined, and some multinational group structures such as dual listed companies will also be considered. Other techniques may be implemented by investors acting on the international capital markets. This includes cross-border dividend stripping which was, or is being, implemented to the effect of channelling tax credits internationally, a technique which provoked some reactions from certain tax authorities and resulted in several highlighted court decisions. The use of derivatives instruments to create synthetic equity instruments also seems to raise interesting tax issues.

Chair of the Session: Philippe Derouin (France)

Break-out Session B
Holding and conduit regimes
This session will examine how countries approach the issues raised by intermediate holding companies. Such arrangements may arise by design, for tax or non-tax purposes, or as the result of a business acquisition. Consideration will be given to taxation in the residence country of the parent, the subsidiary, and the interposed holding company. Subjects will include taxation of dividends and gains on share dispositions, application of tax conventions, anti-avoidance and CFC rules, and conduit or other special regimes.

Chair of the Session: Robert Couzin (Canada)

Subject 2
Consumption taxation and financial services
Financial services are generally exempted from VAT or other general consumption taxes. This panel will examine the operation of this exemption system for financial services and its impact on the economy in general and market competition in particular. The panel discussion will be divided into three main parts. The first part will deal with the broad approaches being followed around the world for taxation of financial services. The second part will deal with the problems being encountered under the current exemption systems. Subjects in this part will include the partial input tax deduction schemes, application of tax to outsourcing of processing of financial transactions, and the guidance provided under recent landmark court decisions in Europe. The third part will focus on options for change, both ad hoc options to address specific problems, and general options to make financial services taxable or to simplify the partial input tax deduction system.

General Reporter: Prof. Dr. Han A. Kogels (Netherlands)
Chair of the Plenary Session: Satya Poddar (Canada)

CONGRESS SEMINARS

Seminar A
Direct tax aspects of financial services
This Seminar will address a series of issues relating to timing and character in the direct taxation of these entities and instruments. In particular, it will explore the line between accrual and realization, the rules allowing use of mark-to-market accounting, the meaning of both the "mark" and the "market", and other emerging questions under a mark-to-market regime. Special rules relating to (a) foreign currency, (b) hedging, (c) notional principal contracts, and (d) contingent payments will be noted. The effects of tax arbitrage on the foregoing matters will be described.

Chair: David H. Rosenbloom (USA)

Seminar B
International high tech tax incentives and hurdles for transfer of technology
There are three different tax incentives regimes that countries utilise to attract companies that perform research and development activities, and other functions that are part of developing high technology products and services. Some like Canada, USA, UK, France and Japan offer an R&D credit regime that allows a limited credit against the taxpayers’ tax liability. Others like Singapore, Thailand and Taiwan have special tax rates offered on a company by company activity basis. The third approach is utilised by countries like Ireland that offer an overall low tax rate and have other factors (sufficient energy, educated labour force, etc.) that attract high tech companies. The flip side of this issue is the hurdles and burdens imposed by some of the same countries on the transfer of technology. For example, the rules of IRC Section 367, cost sharing arrangements and transfer pricing are all utilised to discourage the transfer of technology to other countries.

Chair: Stewart Karlinsky (USA)

Seminar D
Treaty treatment of gains on shares
The Seminar covers the income tax regime applicable to gains on shares realised by individuals or companies under treaties. The Seminar is divided into five segments: (i) qualification of the gains on shares; (ii) determination of the gains on shares, timing and other computational issues; (iii) gains on shares arising from corporate transactions other than reorganisations; (iv) EU aspects; (v) possible treaty solutions.

Chair: Prof. Guglielmo Maisto (Italy)

Seminar E
General anti-avoidance rules and international taxation
This Seminar examines the operation and effects of domestic statutory General Anti-Avoidance Rules (GAARs) on the taxation of international transactions. The focus of the Panel is on the question, how significantly and in what ways does the domestic anti-abuse rule impinge on the taxation of international transactions? The Seminar will consider the principal design elements of the domestic GAAR, the likely application of the GAAR to a selection of common international transactions, the interaction of the domestic GAAR with specific international rules, and the relationship between domestic GAARs and DTAs.

Chair: Graeme Cooper (Australia)

Seminar F
Recent developments in international tax
After the successful launch at the 2002 Oslo Congress this Seminar will be a regular feature of IFA Congresses. As the title indicates, the Seminar will deal with important recent developments that will be of interest to persons involved in international tax law. These may include court decisions, legislative or treaty developments, transactions. The criteria for selection are that the topics must be current, of general interest and of more than ordinary interest to international tax practitioners and other professionals. A Steering Committee of four experienced practitioners will select the topics and the panel members three months before the Congress. These will of course be communicated through the Congress and the IFA website. Congress participants are invited to give their views and comments on the topics selected via the website.

Chair: to be decided

Seminar G
Article 9 OECD Model Convention "What is an associated enterprise?"
The scope of the term “associated enterprise” of article 9 of the OECD and UN Model Conventions, also featuring in the transfer pricing legislation of many countries, is far from clear, in particular because of the reference to “control”. The great difference in tax treatment between associated and non-associated these days makes it very relevant to arrive at a common interpretation of the term.

Chair: Prof. Hubert Hamaekers (Netherlands)

Seminar H
Offshore investment fund regimes
A number of countries are considering the enactment of regimes for assessing taxpayers who invest in offshore investment funds, sometimes called “foreign investment fund” or “fif” regimes. Seminar H will consider the scope and operation of typical fif regimes. It will address a major difficulty of such regimes, obtaining adequate information, and measures that countries have adopted to overcome this difficulty.

Chair: Prof. John Prebble (New Zealand)

Please see the Congress website www.ifa-sydney.com for the detailed programme.

Future Congresses are planned as follows:

2005 - Buenos Aires, Argentina
2006 - The Netherlands
2007 - Kyoto, Japan
2008 - Belgium

The SAFA Scientific Committee ensures that South Africa always submits national reports on the two subjects chosen for annual IFA congresses. These reports are published in the annual Cahiers de Droit Fiscal International, of which more here.

National reporters from South African since 1993:

* * *

1. National Reporters required - Buenos Aires 2005

The International Fiscal Association has requested that its member countries appoint National Reporters for the two subjects to be dealt with at the 2005 IFA congress in Buenos Aires.

The subjects are:

Subject I: Source and Residence - New configuration of their principles.

Subject II: Taxation of cross-border reorganisations.

The responsibility of a National Reporter is to prepare a report on the subject, taking into account guidelines issued by the General Reporter, not to exceed 10 000 words. The national reports must be submitted to IFA by 15 October 2004. All national reports are published in the annual IFA Cahiers in CD-ROM format. The two subjects will then be debated at the IFA Congress in Buenos Aires in September 2005.

It is quite acceptable for 2 or more authors to work together as National Reporters on either of the subjects.

Applications can be emailed to Marius van Blerck at: mvanblerck@sbic.co.za, and copied to marius.vanblerck@standardbank.co.za

2. Correspondent wanted for special IFA/IMF tax project

The International Fiscal Association has requested that its member countries each appoint a Correspondent for a special joint tax project with the IMF, SAFA would like to appoint such a correspondent for South Africa.

The IMF Legal department has suggested that IFA work together with them in the Tax Law Research Guides (TLRG) project.

• The TLRG project is part of the International Tax Dialogue (I.T.D.), a co-operation arrangement between the IMF, OECD, and World Bank. The idea is to provide individuals working on international tax issues, guidelines to do comparative tax research, primarily on the web. While the primary target audience of the TLRG will be government officials, the website should be open to all, so that anyone interested in comparative tax law can take advantage of it.
• The TLRG would not list each country's tax laws, but information on how to research each country's tax law. This could include references to regulations and other administrative materials, as well as treatises, case law, and so forth, depending on what is applicable in the country in question. While tax officials and practitioners in a particular country will be familiar with what is available, foreigners typically will not be and will need guidance. In short, they would be a brief guide to researching the tax law of a country.
• These research guides will function best on a decentralised basis, with one person in each country taking responsibility for his or her guide. Links to these guides can then be included on the ITD website, and may be included on the IFA website as well.

Applications can be emailed to Marius van Blerck at: mvanblerck@sbic.co.za, and copied to marius.vanblerck@standardbank.co.za

The Cahiers de Droit Fiscal International are published once a year and distributed free to all members of the Association. These Cahiers contain preparatory material and treat the subjects to be discussed at the following Congress. They comprise National Reports together with a General Report on each of the two Subjects selected for the Congress of that year. National Reports are published in one of the official IFA languages, i.e. English, French or German, with summaries in the remaining languages plus in Spanish. General Reports are printed in all four languages. The Cahiers are an invaluable source of information of lasting scientific value for any specialist interested in international or comparative fiscal law.

In the IFA Congress Seminar Series the proceedings of some of the Seminars held during the annual Congresses are published.
In addition, IFA publishes a Yearbook containing information on the Association's activities and a complete list of members. This book is for IFA members only.