Playing the Global Tax Game Without Getting Burnt: What Every South African CFO Must Get Right

It’s no longer enough to know your way around a balance sheet. Today’s CFO is the nerve centre of every strategic decision, from pricing to expansion, and increasingly, international tax planning. If your company operates across borders, the tax implications can be complex, high-risk, and very expensive. Get it right, and you unlock value. Get it wrong, and you invite SARS, reputational damage, and boardroom headaches.

Here’s what South African CFOs need to know to stay in control.

It Starts With the Big Picture

You can’t optimise what you can’t see. Smart tax planning begins with mapping your group’s global tax footprint: where income is earned, where costs sit, and, crucially, where decisions are made. In a post-BEPS world, SARS and other authorities are less interested in paperwork and more concerned with substance. If your IP sits in the Netherlands, but your R&D and decision-making are in Cape Town, expect questions.

Transfer Pricing Is Not Just for the Auditors

Transfer pricing isn’t an annual compliance tick-box. It’s a living, breathing risk area that touches every part of your business: service fees, cost allocations, royalty flows, intercompany loans. SARS requires a master file, local file, and CbC report if you meet the thresholds, and they’ll want to see the logic, not just the paperwork. More than ever, they’re challenging margins that “don’t make sense” and services that “add no value.”

If you can’t explain the commercial rationale for every intercompany transaction, you’re not ready for an audit.

Intellectual Property: Location Matters

The days of offshoring IP to tax havens are numbered. If the strategic and economic ownership of your IP is effectively in South Africa, where your teams build, manage, or commercialise the asset, SARS will argue the right to tax a portion of the profits. And they’re not shy about using their transfer pricing powers to do so.

Align your IP strategy with where real decisions happen. Otherwise, your IP savings could cost you more than they’re worth.

Getting Money Out Without Losing Half of It

When it comes to repatriating profits, dividends, interest, royalties, or management fees,the tax consequences are real. Withholding taxes apply, exemptions are limited, and SARS takes a dim view of companies stripping profits without real substance or value creation.

Also beware of thin capitalisation: if your offshore entities are funded mainly through intercompany loans, SARS will scrutinise interest deductibility under transfer pricing rules. The debt-to-equity ratio alone isn’t enough; they’ll look at function, risk, and return.

DTAs Can Help, But Only If You’ve Got Substance

South Africa has one of the more extensive networks of double tax agreements in Africa, but the benefits are increasingly under threat. The Principal Purpose Test (PPT) in most new treaties allows SARS to deny treaty benefits where they believe the main purpose was to secure a tax advantage.

If your Mauritius subsidiary doesn’t have a real business presence – staff, premises, operations, you’re on thin ice. Structure first for commercial substance, then for tax efficiency.

CFC Rules Are a Silent Killer

Under South Africa’s controlled foreign company (CFC) rules, if your company holds more than 50% of a foreign entity, the net income could be taxed in SA, even if no money comes home. Passive income, in particular, is a red flag.

You can escape the rules under the foreign business establishment exemption, but SARS will expect evidence of real decision-making abroad. Don’t assume you’re safe just because it’s “foreign.” Check your structure annually and test it properly.

Don’t Sleep on VAT and Customs

VAT on imported services, transfer pricing adjustments that trigger VAT liabilities, customs under-valuations, these can quietly derail your tax position. With VAT refunds increasingly delayed and SARS reviewing cross-border services with a fine-toothed comb, the risks are growing.

Ensure your teams are aligning procurement, finance, and tax reporting. It’s no longer just an operational issue, it’s strategic.

BEPS 2.0 Is Coming, Even If SA Is Slow

OECD’s BEPS 2.0 will soon impose a global minimum tax of 15% for large multinationals (revenue above €750m). Even if South Africa doesn’t implement all aspects immediately, your parent or peer jurisdictions might, affecting your effective tax rate, transfer pricing approach, and group structuring.

This is no longer a ‘wait and see’ situation. CFOs must start stress-testing their structures now.

SARS Wants to See Your Strategy, Not Just Your Calculations

Tax is now a reputational issue. Investors, boards, and regulators want to know: does your business have a tax governance framework? Is it updated? Reviewed by the board? Implemented day to day?

SARS expects you to:

Document your tax risk approach

Explain how tax aligns with business strategy

Demonstrate oversight of aggressive or uncertain tax positions

If your group structure looks clever but can’t be defended under commercial scrutiny, it’s not a solution, it’s a liability.

Tax Is No Longer Just About Saving Money

For the CFO, tax planning is about resilience, not just savings. It’s about knowing where the risks are buried, being able to explain your position, and ensuring the business isn’t caught off guard by regulation, litigation, or reputation risk.

Good tax planning doesn’t start with a loophole, it starts with a strategy. If you’re not building that strategy at board level, you’re not doing your job.

Playing the Global Tax Game Without Getting Burnt: What Every South African CFO Must Get Right