CFC rules were not needed when exchange control was very strict. Now South Africa is following Australia, France, the United States, the United Kingdom and other countries. The Katz Commission dealt specifically with the issue. Its income is deemed to be that of the participators. A gift to a foreign entity causes its income to be attributed to the donor.
Credit is given for foreign tax.
Legislation is expected confirming the favoured status of the international holding company or headquarter company. The legislation appears on the whole essential to the ultimate abolition of exchange control, but a number of issues remain to be addressed. When the offshore regime began in 1992, there were only 4 treaties. But it is still useful for capital gains and interest. There are now 19 treaties, and 12 more in the pipeline.