Towards tax harmony in Africa TM Africa Tax Conference 2015
Can tax harmony be achieved in Africa? TM Welcome to the Africa Tax Conference 2015 30 September - 2 October Johannesburg, South Africa At this year s Africa Tax Conference TM we will explore whether it is possible to create harmony in African taxation and what this means for taxpayers and tax regulators. We will cover issues such as the proposed continental free trade area from Cape to Cairo, the benefits of uniform tax administration and the impact of the OECD vs UN on tax. Last year we focused on the importance of a strong entrepreneurial ecosystem to attract capital, both financial and human, to Africa; now we will revisit this topic and focus on whether this ecosystem can support companies that are struggling and can potentially fail. We will look at what it takes to support viable and necessary enterprises, restructure and preserve them, hopefully attracting great sources of capital and increasing job creation. We will also address the issue of increased controversy arising from additional transparency. How are companies dealing with these changes? Topics such as influencing tax policy, restructuring operating models and dealing with controversy will be unpacked. Finally we look ahead and investigate the possible impact of future megatrends on taxation in Africa. Our insight sessions will once again include EY tax experts from across Africa and external speakers to address issues from permanent establishments, transfer pricing to indirect taxes and the evolution of African tax legislation. Please use this document to help navigate your way around the Africa Tax Conference TM agenda. 1
Agenda Day 1 Wednesday 30 September 2015 Key: The icons below indicate who would find each session most beneficial C - Suite Business operations Financial executives Policy, government affairs and public relations officials Legal or tax counsel Tax directors workshops Navigating the employee payroll life-cycle Tax compliance has become more complex. Payroll management must be balanced with tax authorities expectations and business bottom line expectations. This leaves employees in the middle of a fine balancing act. In this workshop we will discuss the balancing act of corporates to keep all stakeholders satisfied across the payroll lifecycle covering various considerations such as: 14:00-16:00 Employee recruitment in light of the unprecedented war for talent across Africa Ongoing payroll management Employee exit Impact of external stakeholder attention to multinationals: Increasing number and intensity of tax audits Aggressive revenue collection targets impacting revenue approach Varying levels of maturity of revenue authorities Previously acceptable tax practices are being more frequently challenged Increase in social security audits, payroll levies and administration The evolving need for regional models 2
Day 1 Wednesday 30 September 2015 Taxation of extractive industries in East and Central Africa are these in harmony? 14:00-16:00 The extractive industry is highly topical in both Zimbabwe and Zambia with the reports on the discovery of gas deposits in some parts of Zimbabwe and possibly Zambia. In Zimbabwe, the cabinet is reported to have approved a new policy for the mining sector including reforms in the mining industry. We will compare the taxation of extractive industries in the east cluster (Kenya, Uganda, Rwanda, and Tanzania) with those in Zambia, Zimbabwe and Mozambique and discuss the pros and cons of the tax regulations and whether there is any move towards the harmonisation of the extractive taxes in these countries and regions. Included in the discussion will be what EY believe are best practices and whether these are being included in the new extractive industries taxes that have been introduced. Exploring the impact of recent Global VAT changes for financial institutions 14:00-16:00 VAT is often the largest tax burden for financial institutions. At the same time it is a tax that is hidden in ERP systems. In June the Davis tax committee report to the Minister of Finance was published with the recommendation that South Africa explore other ways of treating VAT on financial services. In this panel we will discuss recent developments in the continent as well as some high level developments around the world to explore the possible impact in South Africa. Succession planning for family owned businesses 14:00-16:00 With 80% of businesses expected to change hands in the next 10 years, 62% of business owners have not chosen a successor and this mainly affects family owned businesses. The session aims to address the four dimensions of a succession plan developed by EY s Family Business Center of Excellence: leadership, ownership, legacy and values, and wealth transition. These four dimensions are at the heart of any successful succession plan and are key considerations for all three primary stakeholder groups owners, families and the business and investments. We will begin with a presentation followed by a panel discussion which will bring some of the considerations to the fore and also allow for knowledge sharing by successful family business owners. 3
Day 2 Thursday 1 October 2015 08:00-09:00 Registration Tea and coffee served 09:00-09:30 Welcome to the Africa Tax Conference TM 2015 Creating transformation and value through restructuring Is it safe to enter the African market today? Opportunity to achieve great success also comes with the possibility of failure. Plenary 1: 09:30-10:45 Last year we focused on the importance of a strong entrepreneurial ecosystem to attract capital, both financial and human, to Africa; now we will revisit this topic and focus on whether this ecosystem can support companies that are struggling and could potentially fail. We will look at what it takes to support enterprises, which could play an important role in the African market, to help them restructure in order to preserve them to attract greater sources of capital and increase overall job growth. Tightening of budgets, both within government and private sectors have placed a great strain on all aspects of enterprises. Private, public and non-profit sectors are seeing increased demand for their services, yet reduced capital, including government funding, often leave them too thin to support these demands. Can Africa learn from the bankruptcies of global giants, such as General Motors and Chrysler, which have emerged more powerful, creating jobs globally; or from the experience of the City of Detroit (USA), which recently emerged out of the largest municipal bankruptcy in the world and now re-capitalized, drawing new investors, including a new generation of talented people, back to its city centre? We will explore the drivers necessary to protect jobs, strengthen social and retirement programs and create globally competitive enterprises from near ashes. Our panel will examine the evolving roles of how the public, private and philanthropic parties must come and work together during times of turbulence to find true, transformational change. 10:45-11:15 Tea and coffee break 4
Day 2 Thursday 1 October 2015 Striking the right chord in international tax controversy Plenary 2: 11:15-12:30 International tax risk continues to grow as the OECD BEPS initiative work streams have reported back and domestic law changes are on the increase. These changes will result in increased tax transparency and increased scrutiny by revenue authorities. Join our panel of experts to understand how companies can practically address these risks through : Influencing and partnering in the development of African tax policies Understanding the impact of increased transparency Aligning business models with substance Rebalancing their capital structure vs supply chain Dispute resolution strategies 12:30-13:30 Lunch The BEPS project is the beginning, but is the end in sight? We meet in Johannesburg, a week ahead of the G20 Finance Ministers meeting. It is clear that, for political purposes, the OECD BEPS project will be declared a success. The project is likely to have a significant impact on transfer pricing and international tax globally but what will the impact be in Africa? Specific questions that remain include: session 1 13:30-15:00 Which BEPS actions relating to transfer pricing and international tax failed to generate consensus, and what does that mean for Africa? Which elements will be implemented in Africa (including when, where and how), and which parts are less important? Which issues are still open for debate, and how might the debate play out? In addition to addressing these points, this session will provide practical insights showing how the BEPS action points 7, 8,9,10,11 and 13 are likely to apply to MNEs operating in Africa. In particular, we will analyze the output from an illustrative country-by-country report and our panel will evaluate the output in terms of these 6 action points. This will highlight the many issues arising from the additional information that revenue authorities, NGOs and other stakeholders will have access to. 5
Day 2 Thursday 1 October 2015 session 2 13:30-15:00 Business and tax consequences of capitalization options An emerging policy issue in many jurisdictions around the world is the role that taxation should play in encouraging companies to opt for equity as opposed to debt financing. Join EY s Tax and Transaction professionals in a roundtable discussion on the business, accounting and tax attributes of different financial instruments in key African jurisdictions. Our panel will discuss the potential benefits and detriments of capitalizing companies with various kinds of equity and debt, including hybrid instruments. Balancing flexibility in workforce needs and key variables in employees tax rules across jurisdictions session 3 13:30-15:00 When expanding and growing into new markets in Africa, companies are faced with a number of challenges in moving employees across jurisdictions. These include immigration quota regulations, stringent employment laws, minimum wage requirements, small talent pools and complex tax regimes. In addressing these challenges companies have been forced to revisit traditional employment arrangements and implement flexible recruitment and employment structures, such as the use of resource labour brokers. Our panel will be discussing the key trends in these flexible arrangements, what we are seeing working and what not and how to maintain the balance between implementing these structures and ensuring regulatory compliance. 6
Day 2 Thursday 1 October 2015 VAT is managed by ERP systems, but who manages the ERP systems? session 4 13:30-15:00 The global best practice is to manage your VAT in your ERP system, however default systems will not always be able to manage VAT properly. In this panel discussion we explore: How to use existing systems to manage VAT Use of analytics and tax engines to manage your VAT Simple ways to release VAT cash flow by better management of the ERP system Provide real examples and solutions in relation to managing VAT and Customs in an IT14SD (reconciliation of these costs to your financial statements) 15:00-15:30 Tea and coffee break Plenary 3: 15:30-16:45 How global megatrends will change tax Megatrends are social, economic and political changes with formative influence on the underlying structure, ways of life and value systems of a society. Some of these megatrends include the food-waterenergy nexus, technology, big data and transparency, population aging and emerging markets. Our panel of clients and experts will set out the four megatrends and then discuss the impact of these on tax in the future. We will get the perspective of a corporate tax director in commerce as well as revenue service officials as to how they are responding to these emerging developments. Cocktails and gala dinner 7
Day 3 Friday 2 October 2015 08:00-08:30 Registration Tea and coffee served 08:30-08:45 Welcome to Day 3 Africa s future - harmony or discord in the orchestra? Plenary 4: 08:45-09:45 In the context of international tax policy developments such as the OECD BEPS initiative, South Africa s Minister of Finance has called for African countries to harmonize their tax policies, tax legislation and tax administration. Join us for a panel discussion where we will unpack the answer to the following questions : How real is the possibility of a continental free trade area from Cape to Cairo? What would the practical benefits of such a free trade area be for companies operating in Africa? Can tax legislation be harmonized across Africa? What are the benefits of a uniform tax administration procedure across the continent? Is the current intra-africa tax framework permissive of a continental free trade area versus Africa s relationship with Europe? Goods versus service intra-africa trade? What are the UN or OECD tax initiatives? What lessons can be learnt from the EU? sessions 5-8 session 5 10:00-11:30 Permanent establishments: Recent trends and developments Permanent establishment remains one of the hardest BEPS action items on which to gain consensus. In this session we consider recent developments in Africa and abroad. 8
Day 3 Friday 2 October 2015 Operating models in Africa - enabling tax to respond to business demands session 6 10:00-11:30 Tax managers need to be able to respond to the fast growing business demands and expansion in the continent without disrupting growth or losing control. Our panel of tax experts, who have helped numerous multi-nationals set-up hubs in Africa will be sharing ideas on: Alignment of tax to the Africa strategy of the business, route to market and expansion plans Proven models in each region; including all aspects of tax that impact the business (ETR, holding location, double tax treaties, withholding taxes, exchange controls, trade and non trade barriers, VAT leakage and transfer pricing). The African tax legislative perspective - then, now and what could be around the corner session 7 10:00-11:30 Our Africa Tax Coordination Services team was established more than 10 years ago. Working across the continent for this length of time we have noted with interest the increased number of changes and tax reforms taking place in Sub-Saharan Africa. Our panel of representatives from five of our clusters will focus on: Key legislative changes in the past five years and recent trends identified that could be indicative of future changes in specific regions or across the continent Tax administrative matters such as filing of returns and payment of taxes The focus of the conversation will be to provide an update on legislative changes and the trends we have noted. The panel will be asked to share experiences with regards to: Practical implications of tax changes and how to manage this Uncertainties and how to deal with these Focus areas of the revenue authorities and their approach to changes in legislation 9
Day 3 Friday 2 October 2015 The winning tax transformation trinity - data, technology and operations In this session we will discuss the winning trinity and the success factors in transforming your tax operations today for the challenges of tomorrow. session 8 10:00-11:30 In an open dialogue we will share thoughts, key themes and experiences of what we are seeing in Africa and around the globe when considering tax transformation. This will include: The highs and lows of tax transformation Transformation readiness - benchmarking your tax operations: why? how? and when? Growing transparency demands and the importance of data readiness for tax History of tax technologies and how they are evolving to address the challenging environment of today and tomorrow How effective technology enablement is driving a step change in the value tax can provide to the wider business Why is Big Data critical for tax and the way the tax function operates? Efficiently managing data and creating efficient processes across tax and the broader business Tax governance and oversight: gaining the insight to have control needed in today s environment 11:30-12:00 Tea and coffee break sessions 9-13 Tax policy and legislation: Way forward for businesses in Anglophone West Africa session 9 12:00-13:30 This session will provide an overview of tax policy and law related issues in Nigeria and Ghana. In particular the policy implementation, interpretation of tax legislation and general tax administration as this affects recent contentious issues such as: taxation of non-residents permanent establishments transaction taxes pioneer certification We consider how this impacts business and investor confidence and propose recommendations on how these issues can be addressed to create an enabling environment for growing businesses in Anglophone West Africa. 10
Day 3 Friday 2 October 2015 session 10 12:00-13:30 Record to report - Are you audit ready? Every company faces the challenge of being audit ready whether it is for an internal, external or revenue authority audit. In this session we will be discussing ideas on how to effectively organize the record to report operations to be ready for these audit interventions. We will share practical insights on some of the new practices such as the use of data rooms, organizing record retention and understanding where there may be overlaps. session 11 12:00-13:30 Tax and Treasury operations in Africa Finding the optimal means for raising, investing, preserving and optimizing capital for Africa continues to be one of the greater challenges in corporate treasury management. MNCs are continually needing to rebalance volatility in funding requirements against supply chain and the impact of new anti-beps measures. Our panel of specialists will discuss the key structural decisions required to successfully navigate the host challenges in Africa including: Withholding taxes Interest deductibility Thin-cap Anti-hybrid rules CFCs Exchange controls 11
session 12 12:00-13:30 Trade blocks in Africa - A roadmap to real integration Our panel will discuss the practical difficulties in relation to the African trade blocks and in particular focus on the harmonized application of tariffs, customs valuation methods (including alignment to transfer pricing), single border post, dual membership and administrative processes. The session will discuss both the theoretical and practical ways to resolve trade and non trade barriers in various regions in Africa using actual examples. session 13 12:00-13:30 French speaking Africa: Understanding of the OHADA law and some common legal questions to consider 17 countries in French speaking Africa adhere to the OHADA legislation. In this session we discuss the impact of the OHADA law when doing business in these countries and the main compliance requirements to consider. We further address some key legal questions you may have when operating in this growing region. 13:30-14:30 Lunch Thank you for joining us. Conference ends 12
Meet EY 29 and 30 September Private client meetings Connect with an EY representative or team to privately discuss those complex issues facing your business. The meetings will be held at EY, 102 Rivonia Road, Sandton. In addition to attending the conference, this is an excellent opportunity for you to discuss your tax issues and growth objectives with some of our most experienced colleagues from across Africa and the globe. Bookings for the private client meetings can be made when registering for the event. Please note that there are limited slots available and they will thus be scheduled on a firstcome, first-served basis. To keep updated and for all materials related to the conference visit www.ey.com/za/atc2015 Join the conversation @EY_Africa #AfricaTax 13 13
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