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FEATURED EVENT: 7th Annual Africa Transfer Pricing Summit 2018

You are invited to join us at the 7th Annual Africa Transfer Pricing Summit, proudly brought to you by the South African Institute of Tax Professionals (SAIT) and The Tax Faculty, in association with The African Tax Administration Forum (ATAF). The conference will take place from 21 - 23 November at The Capital on the Park in Sandton, Johannesburg.

Tax Conference
Penalties for non-submission of corporate income tax returns

As you may be aware, SARS currently imposes administrative penalties only in respect of the non-submission of individual income tax returns. As from 7 December 2018, administrative penalties for late Corporate Income Tax (CIT) returns will be imposed. These penalties will be raised in terms of section 210 of the Tax Administration Act and the required gazette will be issued in terms of section 210(2) of that Act.

 

To ensure that the concerned parties are adequately informed,...

SARS

Tax Administration & Interpretation
(SARS and Office of the Tax Ombud)

REQUEST FOR SUBMISSIONS: REVIEW IN TERMS OF S16(1)(B OF THE TAA 2011 (SUBMISSION DEADLINE HAS BEEN EXTENDED TO 30 NOVEMBER 2018)

The Tax Ombud Judge Bernard Ngoepe is conducting an investigation into Fluidity of the Pay as you earn statements of accounts and SARS’s disregard of the timeframes prescribed by the Rules for the resolution of disputes. Stakeholders are requested to make submissions on the investigation which follows the recent approval by the then Finance Minister for the Tax Ombud to investigate the South African Revenue Service (SARS) in relation to systemic and emerging issues arising from taxpayers and...

Tax Ombud
Guide on the calculation of the tax payable on lump sum benefits (Issue 3)

A member of a retirement fund becomes entitled to a lump sum benefit when his or her membership of that retirement fund terminates. The taxable portion of the lump sum benefit is determined under the provisions of the Second Schedule, which takes into account certain allowable deductions. Once determined under the Second Schedule, the taxable portion of the lump sum benefit is included in the taxpayer’s gross income1 and is subject to the rates of tax applicable to lump sum benefits. This...

SARS
Binding Private Ruling (BPR) 311 – Photovoltaic solar energy plants

This ruling determines the deductibility of expenditure to be incurred to install photovoltaic solar energy plants at sites owned and leased by the applicant.

SARS

TAX CASES

Commissioner for the South African Revenue Service v Digicall Solutions (Pty) Ltd (927/2017) [2018] ZASCA 137 (28 September 2018)

Income Tax Act 58 of 1962 – s 103(2) – taxpayer company – successive changes in shareholding in consecutive tax years – sole purpose from time of first change in shareholding to preserve and utilise assessed loss for set-off against future income – assessed loss carried over to next tax year – second acquisition of shares – income thereafter received by taxpayer – income indirect result of first acquisition of shares – set-off of assessed loss against income disallowed.

SARS Court Cases
C:SARS v Volkswagen S A (Pty) Ltd (1028/2017) [2018] ZASCA 116 (19 September 2018)

Income tax – valuation of stock at year end – s 22(1)(a) of Income Tax Act 58 of 1962 – whether stock to be valued in accordance with International Accounting Standard 2 (IAS 2 or AC 108) at net realisable value.

SARS Court Cases
CSARS v Amawele Joint Venture CC (908/2017) [2018] ZASCA 115 (19 September 2018)

VAT – zero rating of supplies of services in terms of s 11(2)(s), read with s 8(23) of the Value-Added Tax Act 89 of 1991 – whether supplies made in terms of the Housing Subsidy Scheme referred to in s 8(23).

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Draft Response documents on the 2018 draft tax bills

The National Treasury today publishes the draft Taxation Laws Amendment Bill, 2018 (TLAB) and draft Tax Administration Laws Amendment Bill, 2018 (TALAB). The TLAB and TALAB include the legislative amendments for the more complex tax proposals that were announced in the 2018 Budget Review on 21 February 2018.

National Treasury
Speech by Minister of Finance Mr. Nhlanhla Nene 2018 Tax Indaba

It is my honour to give this opening address to the 2018 Tax Indaba. Tax policy and tax administration are not usually seen as especially interesting topics in the eyes of the general public, but that has certainly changed after the events of the past few years.

National Treasury
Media Statement: Release for public comment: Report by the Independent Panel on the review of the current list of zero-rated VAT items

The Minister of Finance today releases the report by the Independent Panel on the review of the current list of items that are zero-rated for VAT purposes for public comment by 31 August 2018. The Minister appointed the panel after the announcement in the budget in February of the increase in the rate of value-added tax (VAT) from 14 to 15 per cent effective from 1 April 2018. 

National Treasury

Call For Comment
SAIT member comments can be directed to taxpolicyadmin@thesait.org.za

Draft public notice relating to the incidences of non-compliance by a person in terms of section 210(2) that are subject to a fixed amount penalty in accordance with section 210 and 211

The incidences of non-compliance, that are subject to a fixed amount penalty in accordance with section 210(1) and 211 of the Act, are listed for public comment.Next due date for comments: 30 October 2018

SARS
​Income Tax Act, 1962

Draft list of qualifying physical impairment or disability expenditure & Draft ITR-DD Form – Confirmation of Diagnosis of Disability. Next due date for comments: 5 November 2018

SARS
INVITATION FOR COMMENT ON THE DRAFT ANTI-AVOIDANCE OF TAX BILL, 2018

The Anti-Avoidance of Tax Bill aims to give SARS the necessary legal mechanisms to tackle aggressive and illegal avoidance.

Government Gazette

International and Regional News
(OECD and ATAF)

Media Advisory - 18th International Economic Forum on Africa and launch of Revenue Statistics in Africa, 31 October 2018

Since last March, 49 African countries signed the African Continental Free Trade Area (AfCFTA) agreement. Once endorsed, AfCFTA, which is part of the African Union Agenda 2063’s long-term vision, will create a single market encompassing 1.2 billion people and more than USD 2 trillion in combined GDP. Simultaneously, a protocol on the free movement of people was adopted by 30 African countries. The 18th ...

OECD
OECD Tax Talks

With a number of important recent and upcoming developments in the OECD's international tax work, the OECD's Centre for Tax Policy and Administration (CTPA) gave the latest tax update. Topics included:

  • Tax challenges of digitalisation
  • BEPS Implementation (Minimum standards; Transfer pricing)
  • Tax Transparency (Automatic exchange of information; Residence/Citizenship by investment
  • Next steps
OECD
OECD clamps down on CRS avoidance through residence and citizenship by investment schemes

Residence and citizenship by investment (CBI/RBI) schemes, often referred to as golden passports or visas, can create the potential for misuse as tools to hide assets held abroad from reporting under the OECD/G20 Common Reporting Standard (CRS).

OECD

CPD Events

PROFESSIONAL INSIGHT

Welcome tax proposals to the debt relief rules

When debt is reduced or written off, certain adverse tax consequences may arise for the debtor. The tax provisions dealing with the debt relief rules are contained in section 19 and paragraph 12A of the Eighth Schedule to the Income Tax Act, 1962 (the “Act”). The current debt relief rules were introduced by the Taxation Laws Amendment Act, 2017 and are applicable in respect of years of assessment commencing on or after 1 January 2018. The trigger for the application of these debt relief...

Lavina Daya & David Marais - ENSafrica
Drastic new Namibian tax law proposals

In the Namibian Budget Speech held in March 2018, far-reaching reforms to the Namibian tax system were proposed, promising to substantially change the basis of taxation in Namibia and impact existing and new business transactions in the country. The key details of these tax proposals are summarised below. Introduction of a residency basis of taxationA significant proposal relates to the introduction of a residency basis of taxation which will apply to “residents” of Namibia as defined with...

Peter Dachs & Lavina Daya
Back to basics: Navigating a SARS audit and dispute process

Receiving and responding to a request for relevant material from the South African Revenue Service (“SARS”) and generally dealing with SARS during an audit or a dispute can be a daunting task for any taxpayer. In this article, we go back to basics in briefly discussing the processes followed by SARS during audits and disputes (up to the appeal stage), including providing some tips and insights in dealing with SARS in these processes, which may assist taxpayers in navigating their way through...

Taryn Solomon - ENSafrica
Africa tax in brief

ANGOLA: Double tax agreement with Portugal signedThe Double Tax Agreement (“DTA”) between Portugal and Angola was signed in Luanda in September 2018. Reportedly, the DTA will enter into force in 2019 following compliance with all the constitutional formalities by both countries. KENYA: 2018 Finance Act assented toThe Finance Act 2018 received presidential assent on 21 September and was gazetted on the same day as Act No. 10 of 2018. The Finance Act largely confirmed the proposals under the...

Celia Becker - ENSafrica
Webber Wentzel Event: Panel discussion on dispute resolution issues

Dispute resolution complaints rank as the second most common category of complaints received by the Office of the Tax Ombud (OTO), with more than 700 complaints (almost 30% of total complaints) received in the 2017/2018 year. Non-payment of refunds is the most common complaint with more than 800 complaints in 2017/2018 (almost 35% of total complaints), and the refunds complaints often have a dispute component. The OTO, with the approval of the Minister of Finance, is currently conducting a...

Webber Wentzel
Disallowance of the utilisation of an assessed loss

In the recent case of Commissioner for the South African Revenue Service v Digicall Solutions (Pty) Ltd(927/2017) [2018] ZASCA 137 (28 September 2018), the Supreme Court of Appeal (SCA) was requested to consider whether the Commissioner for the South African Revenue Service (Commissioner) was correct in disallowing the utilisation by Digicall Solutions (Pty) Ltd (Taxpayer) of certain assessed losses, in terms of s103(2) of the Income Tax Act, No 58 of 1962 (Act).

Gigi Nyanin - Cliffe Dekker Hofmeyr
Interest-free loans to trusts: Proposed amendments, public comments & National Treasury’s response

In the 2018 draft Taxation Laws Amendment Bill, 2018 (Draft TLAB), published on 16 July 2018, it was proposed that s7C of the Income Tax Act, No 58 of 1962 (Act) should be further amended, to broaden the scope of the provision. The proposed amendment relates specifically to s7C(1)(ii)(bb).

Louis Botha - Cliffe Dekker Hofmeyr
No capital gains tax? Ruling on the disposal of property by a PBO

On 31 August 2018, SARS published Binding Private Ruling 309 (BPR 309), which deals with the disposal of an asset by a public benefit organisation (PBO). Specifically, the ruling dealt with the application of the definition of “gross income” in s1 of the Income Tax Act, No 58 of 1962 (Act) and the capital gains tax exemption in paragraph 63A of the Eighth Schedule to the Act.

Louis Botha - Cliffe Dekker Hofmeyr
PWC Tax Alert: SARS to impose administrative penalties for outstanding corporate income tax returns

On Monday, 1 October 2018, SARS notified taxpayers that – from December this year – administrative penalties will be imposed for outstanding corporate income tax returns.

Elle-Sarah Rossato - PWC

Tax News In The Press

Management shambles leaves Sars in disarray

The South African Revenue Service, once one of the nation’s most effective institutions, is in dire straits after more than four years of shambolic management by commissioner Tom Moyane, evidence presented to a judicial commission of inquiry shows.

Mike Cohen
Has Sars disallowed your medical expense claim?

Tax practitioners have been caught by surprise after the South African Revenue Service (Sars) disallowed medical expense claims due to failure to submit the correct supporting documents.

Ingé Lamprecht - Moneyweb
Corporates with outstanding tax returns may face penalties

Returns must be submitted by the end of November if penalties are to be avoided.

Amanda Visser - Moneyweb
Sars presents its annual report to Parliament

Mark Kingon, acting commissioner of the South African Revenue Service (Sars), displayed in-depth organisational knowledge as he briefed Parliament on Sars’s 2018 annual report, delivering a no-holds-barred account of its performance in the year to March 31, 2018.

Barbara Curson - Moneyweb
SARS EFILING FULLY OPERATIONAL

Testimony by SARS Executives at the Commission of Inquiry into Tax Administration and Governance by SARS has led to widespread reporting in the media that the eFiling system is on the verge of collapse.The perception created that the eFiling system is on the verge of collapse is incorrect, and unfortunately has the effect of creating unnecessary alarm and uncertainty.

SARS News
Stress-free tax filing

Tips on how to submit your return efficiently.

Wouter Fourie - Moneyweb