Beneficial Ownership under Tax Law in Botswana: A Foregone Opportunity with the Cresta Marakanelo Case

Abstract

Beneficial ownership is pivotal to any discussion of tax avoidance, especially international tax avoidance which forms the backbone to the phenomenon of base erosion and profit. It is a concept under which an attempt is made to find the “true” or “real owner” of tax benefits especially where another person or entity claims such benefits under aggressively designed tax avoidance schemes. Its importance notwithstanding, the concept of beneficial ownership has been notoriously difficult to define. This paper argues that the 2010 Cresta Marakanelo case was an ideal opportunity for the High Court in Botswana to elucidate on the meaning and application of the concept, but, surprisingly, this was not done. A brief review and discussion of the case is preceded by a discussion of notable cases from other jurisdictions, which highlight the importance and difficulty of defining beneficial ownership, and by an overview of the incorporation of the concept in some international tax treaties.