THE CONSTITUTIONAL Court handed down a landmark judgement in relation to the ongoing and much-publicised Coronation Investment Management (CIM) case. The case involved the ‘controlled foreign company’ regime as contemplated in Section 9D of the Income Tax Act.
The Court was called upon to determine whether CIM’s subsidiary (being a controlled foreign company) had established sufficient presence in Ireland to rely on the ‘foreign business establishment’ (FBE) exemption to prevent the income from the Irish subsidiary from being imputed to CIM (a South African tax resident entity) and taxed in South Africa.
The central enquiry for the Court to consider was therefore whether CIM’s subsidiaries’ business activities in Ireland had the requisite economic substance envisaged in Section 9D.
Therefore, the Court was tasked with identifying the business of the controlled foreign company and determining whether the fixed place of business was suitably…
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