Global Corporates Operating In Sa To Pay 15 Tax On Earnings

President Cyril Ramaphosa has signed a law to enforce a 15 global minimum corporate tax rate for multinational companies that are paying less than 15 tax on their earnings.

The act signed into law last month on the eve of Christmas forms part of a global tax movement for multinationals while cutting down on tax competition between countries.

It is set to introduce significant changes to the way multinational corporations will be taxed.

According to National Treasury, the changes are expected to raise an additional R8 billion in revenue by the 2026/27 financial year.

"We will be looking at the companies that local headquartered companies own and see what theyre paying and then other companies that have subsidiaries in our country. If those subsidiaries collectively are paying less than 15 then they will be subject to the 15 here. And this is where the R8 billion that has been mentioned by Treasury is supposed to be coming from. So, the very, very large corporates I mean, if we take an example globally, one could give an example of Apple, which we know has been paying a lot less than an effective rate of 15 for many years and so have a number of its peers," says tax expert at University of Cape Town Professor Deborah Tickle.