QUESTION 1 (10 marks) Doodle Limited (“Doodle”) is a technology…

Question QUESTION 1 (10 marks) Doodle Limited (“Doodle”) is a technology… QUESTION 1 (10 marks) Doodle Limited (“Doodle”) is a technology company incorporated in the United States of America that specialises in internet-related services and products, which include online advertising technologies, a search engine, and cloud computing. Doodle’s chief executive officer (“CEO”) and a majority of its directors are South African citizens who all reside in Pretoria. Doodle has offices both in Pretoria and New York City. All meetings of the board (on commercial and management issues of Doodle) take place P a g e 3 | 9 at the Pretoria office. The CEO and directors, with the strategy portfolios, manage the company from the Pretoria office. Doodle does not use the conference room in its New York City office and has, therefore, decided to rent it out to Lara Pages who pays R20 000pm rent for the room. Lara is not a South African tax resident. South Africa and America have entered into a double tax treaty in terms of which Article 4 reads: 1. For the purposes of this Convention the term “resident of a Contracting State” means: a) in the case of the United States: i. any person who, under the laws of the United States, is liable to tax therein by reason of his domicile, residence, citizenship, place of incorporation, or any other criterion of a similar nature, provided, however, that this term does not include any person who is liable to tax in the United States in respect only of income from sources therein or of profits attributable to a permanent establishment in the United States;… b) in the case of South Africa, any individual who is ordinarily resident in South Africa and any legal person which is incorporated or has its place of effective management in South Africa;… … 3. Where by reason of the provisions of paragraph 1 a company is a resident of both Contracting States, then it shall be deemed to be a resident of the State in which it is incorporated. WHAT IS REQUIRED OF YOU: 1.1. With reference to relevant authority, advise Doodle on whether or not it is tax resident in South Africa. (6 marks) 1.2. Advise the South African Revenue Services (‘SARS’) on whether or not the rental income Doodle receives from Lara Pages is taxable in South Africa. (4 marks) [10 marks]  Law Social Science Tax law Share QuestionEmailCopy link Comments (0)