Tax

‘Stellar department offering a deep bench experienced in handling a broad spread of tax issues’ – Chambers and Partners, 2018

  • Overview
  • Significant Matters

Overview

Frequent changes in tax law in various African countries, creates a need for access to specialised and professional tax advice.

Our tax lawyers have knowledge based on years of experience and a depth and breadth of tax law skills that few are able to match. We provide tax efficient business solutions by combining this strength with commercial acumen.

Our services range from the tax aspects of corporate transactions to financial structuring and project finance matters to the tax implications of employment decisions. We also handle tax litigation and dispute resolution on behalf of our clients.

Our corporate, banking and finance and commercial lawyers work closely with our tax lawyers to ensure that all aspects of transactions (including mergers and acquisitions, private equity transactions, cross-border investment structures and corporate restructures) are thoroughly considered and planned.

We provide much sought after advice on all tax and regulatory aspects relating to international trade (imports, exports and local manufacturing of goods), particularly customs and excise tax and exchange control.

We represent taxpayers in negotiations with the tax authorities. Where necessary we lobby tax authorities and make representations on a wide range of issues relating to new legislation, obtaining directives and dispute resolution.

Our service extends to alternative dispute resolution proceedings where we regularly act on behalf of tax payers by lodging objections, appeals and review applications against tax assessments.

We have specialist knowledge of a variety of sectors including construction and infrastructure, energy, financial services, logistics, mining, real estate and telecommunications.

Our clients include leading corporates, retail and investment banks, financial institutions and high net-worth individuals in the countries in which we operate. We also work with international law firms to service their clients expanding into Africa.

Significant Matters

  • We are advising the South African Department of Economic Development on a High Court application brought by the Association of Meat Importers and Exporters (AMIE) in two parts. The first part  seeks to interdict the Department of Trade and Industry (DTI) and the International Trade Administration Commission (ITAC) from approaching the Trade and Development Commission (TDC) under the Economic Partnership Agreement (EPA) to impose a safeguard on imported frozen chicken. The second  is to declare the DTI’s decision to continue the safeguard investigation under the EPA, when it had begun under the Trade Development and Cooperation Agreement (TDCA), as unlawful. The applicant seeks an order for respondents to formulate and publish proper guidelines for applications for safeguards under EPA, and then to ensure such approach is followed before approaching the TDC for a safeguard. 

  • We advised the South African Department of Economic Development on a critical tax matter where Cart Blanche Marketing cc (the applicant) sought to have South Africa’s Import Control Regulations reviewed and set aside.

  • We advised the South African subsidiary of a large multinational corporation with operations in more than 90 countries on a tax dispute heard by the Tax Court. The dispute with the tax authorities was over the interaction between the accounting standards and the correct tax treatment of the diminished value of obsolescent and damaged closing stock.

  • We advised Royal Bafokeng Platinum Mine on its acquisition of a concentrator plant and related surface rights (including the water and power allocations) in respect of the immovable property owned by Maseve Investments 11 Pty (Maseve) which may be required by RBPlat to access and operate the plant and access to tailings infrastructure, for a consideration equal to the ZAR equivalent of USD 58 million, and the acquisition of 100% of the shares in and shareholder claims owing by Maseve for a consideration equal to the ZAR equivalent of USD 12 million.

  • We advised Anheuser-Busch InBev (AB InBev) on the African elements of its exit from its 54.5 % stake in Coca-Cola Beverages Africa. The transaction was valued at USD 3.15 billion.

  • We advised Harmony Gold Mining Company (Harmony) on a broad-based black economic empowerment transaction in which Harmony will sell to a BEE SPV 3% of its shares in, and 3% of its loan claim against, Harmony Moab Khotsong Operations, the SPV through which Harmony acquired certain significant mining assets from AngloGold Ashanti. Harmony Gold made vendor financing available to the BEE SPV in order to fund the purchase of the loan claim. The transaction also included the creation of a community trust, as well as an employee stock ownership plan (ESOP).

  • We advised on the complete restructure of The House of Busby’s capital structure and third party debt, thereby avoiding its liquidation and securing our clients’ investments. Busby holds the licences for, among others, Aldo, Forever New and Guess, and is therefore an important competitor in the South African retail fashion market.

  • We advised AfriSam Group on the debt and equity restructure undertaken to optimise and simplify its capital structure.

  • Airports Company South Africa SOC Limited (ACSA) in relation to the implications of the new Customs legislation rollout in South Africa, Customs modernisation, lobbying with SARS and Treasury on draft legislation. The advice is key to ACSA’s role as the airport authority of all airports in South Africa. ACSA’s success is critical to the movement of goods and people in and out of Southern Africa and our advice and guidance is sought to ensure that the airports are fully complaint and operationally functional within the parameters of the new legislation.

  • We acted as tax advisors to Northam Platinum on its USD 10.7 million acquisition of platinum group metals recycling equipment and associated land and buildings for a plant in Pennsylvania, United States of America. This transaction involved cross-border structure issues, including the application of controlled foreign company and transfer pricing rules. 

  • We advised Cell C on its large and complex debt and equity restructure which has alleviated extensive financial pressure allowing it to continue as a profit-making entity in a sustainable and efficient manner.

  • We advised Gold One Group (G1) on the refinancing and upsizing of a USD 200 million margin loan facility provided by the Bank of America NA to G1, and secured by Sibanye Gold’s shares listed on the Johannesburg Stock Exchange. The loan was to enable G1 to subscribe and pay for further shares in Sibanye Gold under its rights issue.

  • Bowmans acted for Superior Homes (Kenya) Plc and its shareholders  in the acquisition of 12.5% of the issued shares in the capital of Superior Homes Kenya Limited by Cytonn Investment Partners Fifteen LLP. We acted as legal counsel for the sellers of the shares and for Superior Homes (Kenya) Plc. We negotiated and drafted all the transaction documents and oversaw the satisfaction of the conditions precedent and completion. The transaction is significant as it was extremely time sensitive and required implementation in a multi-faceted manner.

  • Bowmans advised General Motors South Africa in relation to the disposal of its Isuzu business to Isuzu Trucks South African and related matters.

  • Bowmans acted for Northern Platinum in relation to the tax elements of the negotiation and settlement of agreements with Glencore International AG concerning the operation and maintenance of certain chrome spiral plants and related chrome operations.

    We advised in particular on income tax, VAT and mining tax related aspects of the transaction.

  • Alexander Forbes Group in relation to its transaction with African Rainbow Capital (ARC), a wholly-owned subsidiary of Ubuntu-Botho Investments. From a tax perspective, the tax team specifically assisted with the structuring of a complex transaction which had to take into account tax, BEE and other considerations.  

  • Bowmans was tax and legal counsel to Dis-Chem Pharmacies Limited in relation to its 2016 IPO. Significance: This was an extremely high profile and significant matter, as Dis-Chem is one of the largest pharmaceutical groups in the country. This was the second largest IPO on the JSE in 2016. Our appointment follows an extensive and rigorous process run by four investment banks (two domestic and two international) who have been appointed as joint book-runners. Role: From a tax perspective, our role specifically included structuring the transactions required for the required free float taking into account the company’s requirements and the shareholding structure, as well as arranging and advising on a number of group reorganisation and related transactions.

  • This transaction is significant, as is all going substantial tax work related to this transaction which Bowmans assisted with in 2016 and is assisting with, as it created a global brewer and one of the world’s leading consumer products companies. With an overall deal value of GBP 71 billion (EURO 82 billion), the deal ranks as the largest-ever offer for a UK company and the third-largest takeover in history.

  • Bowmans advised World Triathlon Corporation and Ironman Epic Holdings in relation to its acquisition from Kevin Vermaak, Moxie Marx Close Corporation of the entire share capital of Grandstand Management and Cape Epic, and all intellectual property owned by Moxie Marx CC, which together are responsible for the organisation and implementation of the “ABSA Cape Epic”, the world’s foremost mountain-bike stage race.

  • Bowmans advised Plum LLP in relation to the acquisition of a 23.34% stake in Britam Holdings Limited (Britam) from Britam’s single largest shareholder, British-American (Kenya) Holdings Limited, a company registered in Bahamas. Bowmans acted as legal adviser on the transaction. This involved advising on the structure of the project, drafting and negotiating project documentation, facilitating engagement with the relevant the authorities. The value of the matter was quite a significant amount and the transaction involved a global organisation. Through this transaction, Plum LLP together with associated persons and related companies will control 38.54% of the total issued ordinary shares of Britam.

  • Bowmans acted for Clicks Investments and Clicks Retailers in relation to an asset for share transaction in which Clicks Retailers transferred all of its shares in BTB Media, Clicks Mobile Communications and Sorbet Brands to Clicks Investments, in exchange for shares in Clicks Investments.

  • Bowmans advised Wilderness Holdings in relation to its acquisition of the Governors’ Camp Group of Companies in Kenya and Rwanda. Wilderness Holdings is the holding company for many of Africa’s premier ecotourism brands and is listed on the Botswana Stock Exchange and the Johannesburg Stock Exchange. 

  • Advised Rio Tinto on the sale of its entire shareholding in Riversdale Holdings Proprietary Limited, which holds a 74% direct shareholding in Zululand Anthracite Colliery Proprietary Limited to Galaxy Investments B.V. This transaction was important to the Rio Tinto group to enable it to focus on other core aspects of its global business and to facilitate an exit in a responsible manner by selling to a purchaser committed to making significant investments to ensure the long term sustainability of the mine and associated employment. Galaxy fits such criteria as it falls within the larger Menar Holding Group which has experience in coal mining in South Africa through its interest in Canyon Coal.