Global Minimum Tax in South Africa – What Multinational Groups Must Know
The OECD’s Global Minimum Tax, implemented through South Africa’s Global Minimum Tax Act, introduces a top-up tax regime for multinational entities (MNEs) from 2025. Designed under Pillar Two of the Base Erosion and Profit Shifting (BEPS) initiative, this reform ensures large groups pay a minimum effective tax rate of 15% — regardless of where profits are booked.
Who Must Comply?
- Groups with global turnover exceeding €750 million
- Entities operating in South Africa as part of qualifying global structures
What It Involves
- Top-Up Tax: If the effective tax rate in any jurisdiction falls below 15%, the difference must be paid in another.
- Disclosure & Compliance: Groups must submit detailed calculations and apply country-by-country reporting standards.
- Transfer Pricing Adjustments: Existing policies may need urgent revision.
- Double Taxation Risks: Improper structuring may result in being taxed in multiple jurisdictions.
Immediate Actions for CFOs
- Identify group entities falling within scope.
- Review current effective tax rates.
- Align legal, tax, and reporting frameworks globally.
- Establish a 2025–2026 compliance calendar.
Marwick’s Approach
We provide:
- Top-up tax readiness assessments
- Transfer pricing realignment
- Disclosure support for CbC reporting
- Cross-border tax dispute prevention strategies
Conclusion
The Global Minimum Tax regime is here. For affected multinationals, the risk of non-compliance is significant. Let Marwick & Company help you adapt with confidence and compliance.