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Is your tax practice listed in Taxtalk’s Tax Directory?

If you forgot to book your spot in TaxTalk’s Jul/Aug 2018 Tax Directory, you’re still in time to get listed in the Sep/Oct 2018 edition! Bookings can be made by emailing editor@thesait.org.za. Deadline for submission is 29 July.

 

WHAT DOES THE standard LISTING LOOK LIKE?

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TaxTalk Magazine
IT’S TAX FILING SEASON – WE SPEAK FAIRNESS

The 2018 Tax Filing Season is upon us, and the OTO is committed to providing an impartial and fair service, maintaining a balance between SARS’s powers and duties on the one hand, and taxpayers’ rights and obligations on the other.

Tax Ombud
University of Pretoria: Research on the effect of a change in the VAT rate

Anculien Schoeman, a PhD student at the University of Pretoria is conducting a study to obtain your views about aspects of the South African VAT system. Participants of this survey should earn income other than just a salary (eg a tax practitioner, lawyer, doctor, farmer), or be involved in the management of a business (eg sole proprietor, company, close corporation etc). The questionnaire should take you around 20 minutes to complete.

 

Anculien Schoeman - University of Pretoria

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

Interpretation Note 4 (Issue 5) – Resident: Definition in relation to a natural person – physical presence test

This Note explains the requirements of the physical presence test, with which a natural person, who is not at any time ordinarily resident in the Republic of South Africa during the relevant year of assessment, must comply before that person will be a “resident” as defined in section 1(1).

SARS
Interpretation Note 102 – Classification of risk policy and the once-off election to transfer certain policies or classes of policies issued before 2016 to the risk policy fund

This Note provides guidance on – the interpretation and application of the definition of “risk policy” in section 29A(1); and the once-off election by an insurer to transfer certain policies or classes of policies issued before 1 January 2016 to the risk policy fund under section 29A(13B).

SARS
BCR 063 Income Tax implication of settlement agreement

This ruling determines the treatment of contributions made by employer companies to a trust in terms of a settlement agreement and how the amounts accruing to or received by the trust and the beneficiaries of the trust will be treated.

SARS

TAX CASES

TCIT 13626 JHB 17 May 2018

Income Tax; trading stock; whether there was a diminution in value of the Appellant’s trading stock for the relevant years of assessment.

SARS Court Cases
Red Ant Security Relocation Services (Pty) Ltd and Commissioner of SARS

(Case no. 2999/18) The applicant sought urgent interdictory relief aimed at reinstatement of its tax compliance status so that it can generate a tax clearance certificate pending the determination of review proceedings instituted by it.

SARS Court Cases
TCIT 13251 and VAT 1077 JHB 16 May 2018

​Income Tax & VAT; full bench (3 judges) of the Tax Court i.t.o section 118(5) of the TAA; estimated assessments based on extrapolation of 7 month data; Commissioner concedes that the amount of assessments needs to be reduced prior to appeal hearing commencing without altering the assessments accordingly; under-declaration of income and turnover through the intentional manipulation of taxpayer’s point of sales system (POS);   additional tax 200 %.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Comment & Public Hearing: 2018 TLAB & TALAB

The Standing Committee on Finance invites public comment on the 2018 Draft Taxation Laws Amendment Bill (TLAB) and the 2018 Draft Tax Administration Laws Amendment Bill (TALAB).  Both draft Bills give effect to the tax proposals announced on Budget Day (21 February 2018), as published in the Budget Review.

Parliamentary Monitoring Group
Media Statement: VAT Panel Report

The Chair of the Independent Panel of Experts for the review of the current list of VAT zero-rated items, Professor Ingrid Woolard, today requested from the Minister of Finance an extension of today’s deadline for the submission of its report. The Minister has agreed to extend the deadline from 31 July 2018 to 6 August 2018. The report will be made public soon thereafter.

National Treasury
National Legislation​

2018 Draft Taxation Laws Amendment Bill, 2018 Draft Explanatory Memorandum on the 2018 Draft TLAB, 2018 Draft Tax Administration Laws Amendment Bill, 2018 Draft Memorandum on the objects of 2018 Draft TALAB & Media Statement. 

National Treasury

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

Income Tax Act, 1962​

Draft Guide on MAPs: DTAs or tax treaties as they may be referred to, are international agreements between the governments of two jurisdictions aimed at eliminating double taxation with respect to taxes on income and on capital without creating opportunities for non-taxation or reduced taxation through tax evasion or avoidance.  Next due date for comments: ​15 June 2018 New!

SARS
Tax Administration Act, 2011

Draft notice about returns to be submitted by a person in terms of section 25:  Persons specified in the Schedule to the Notice must submit returns for the 2018 year of assessment, as defined in the Schedule, within the periods specified in the Schedule. Next due date for comments: 23 May 2018

SARS
​Income Tax Act, 1962

Draft Guide on the calculation of the tax payable on lump sum benefits (Issue 3). Next due date for comments: 29 June 2018 New!​​

SARS

International and Regional News
(OECD and ATAF)

OECD joins with Argentina to fight financial crime

OECD Secretary-General Angel Gurría and Argentina’s Minister of Treasury Nicolás Dujovne presided today over the signing of a Memorandum of Understanding to establish a centre of the OECD Academy for Tax and Financial Crime Investigation in Buenos Aires, Argentina.

OECD
OECD Secretary-General Tax Report G20 Finance Ministers, Buenos Aires, Argentina, July 2018

This report contains two parts. Part I is a report on the activities and achievements of the OECD’s tax agenda, and is made of two subparts: looking back at significant achievements and looking ahead at the further progress needed, in particular through the OECD/G20 Inclusive Framework on BEPS. Part II is a Progress Report to the G20 by the Global Forum on Transparency and Exchange of Information for Tax Purposes.

OECD
OECD launches programme in Islamabad to support Pakistan in implementing new international tax standards

As part of a mission held from 16 to 19 July 2018 in Islamabad, Pakistan aimed at launching the induction programme to support the implemention of the BEPS measures and initiating the TIWB programme, an OECD delegation met in Islamabad to discuss the progress of the country in implementing the new international standards to combat tax avoidance and tax evasion.

OECD

CPD Events

PROFESSIONAL INSIGHT

A re-prioritising of sorts? Proposals regarding the interaction between the anti-avoidance rules on dividend-stripping and corporate re-organisations

In 2017, the Income Tax Act, No 58 of 1962 (Act) was amended to strengthen the anti-avoidance rules dealing with dividend stripping. The Explanatory Memorandum on the TLAB (Memorandum) states that these anti-avoidance rules were initially introduced in 2009 to curb the use of dividend stripping structures, whereby a resident shareholder company would avoid income tax (including capital gains tax) on the sale of shares, by ensuring that the target company declares a large pre-sale dividend to...

Louis Botha - Cliffe Dekker Hofmeyr
Tax Revenews | Issue 9

Case Law:  Supreme Court of Appeal: CSARS v South African Breweries

By the ENS Tax department
If no tax debt, SARS must pay the refund: An interesting judgment about the TAA’s refund provisions

It is often mentioned by taxpayers that in their opinion, the South African Revenue Service (SARS) delays the payment of refunds to taxpayers. In light of this observation, the judgment in Top Watch (Pty) Ltd v The Commissioner of the South African Revenue Service (Johannesburg Case No: 2017/4557 and Pretoria Case No: 2016/90099) (judgment delivered on 12 June 2018) is particularly interesting.

Louis Botha - Cliffe Dekker Hofmeyr
South Africa's first transfer pricing case?

Section 31 of the Income Tax Act, No 58 of 1962 (Act) contains South Africa’s transfer pricing provisions which constitutes one of the most contentious areas of tax law not only in South Africa, but around the world. Historically, there has been no judicial precedent in South Africa regarding the application of s31 of the Act and in particular the important “arm’s length” principle. However, in Crookes Brothers Ltd v Commissioner for the South African Revenue Service [2018] ZAGPHC...

Jerome Brink - Cliffe Dekker Hofmeyr
What documents do you need before completing your tax return?

This article aims to provide you with a checklist of information and documents required to make your ITR12 completion as painless as possible

Annelie Laage for TaxTalk Magazine
Recent changes to fringe benefits

Fringe benefits seem like a good idea: Things your employer gives you for free. But working out the tax implications of these non-cash payments can be an arduous task. The article discusses the main changes to fringe benefits in recent years.

Rob Cooper for TaxTalk Magazine
Independent contractors versus employees

For tax and legal purposes, it is important that employers distinguish between employees and independent contractors. Let us demystify the distinction.

Kobus Muller for TaxTalk Magazine
From IRP5 to tax assessment

IRP5s are somewhat like family: they can cause you a lot of headaches but you can’t (and probably don’t want to) live without them. This article aims to provide logical guidance to enable you to make 2018 the year in which you conquer the unavoidable “family reunion” which is the Tax Season.

Adv. Carien van Dijk for TaxTalk Magazine
Loan funding to offshore trusts: the interaction of applicable tax anti-avoidance measures

South African tax resident individuals may consider, whether for estate planning purposes or otherwise, to advance funds to offshore trusts for investment abroad. The South African tax implications arising from the terms of the loan funding arrangement with the offshore trust should, however, also be taken into account. Certain tax anti-avoidance measures are aimed at curbing the transfer of wealth to offshore trusts on loan account where such loans bear interest at below market related...

Hannelie La Grange - ENSafrica

Tax News In The Press

Tinkering taxes at own cost

Some OECD member countries have tried to use their tax systems to ease inequalities, but the practice comes with consequences.

Amanda Visser - Moneyweb
An incorrect IRP5 could jeopardise foreign income, travel tax claims

Without the right source code, taxpayers could be in trouble.

Amanda Visser - Moneyweb
Holding SARS to its own rules: new measures receive a cautious welcome

Taxpayers get longer to lodge objections, but are still at the mercy of the taxman, practitioners say, with sometimes catastrophic consequences.

Amanda Visser - Business Live
Unit trusts: who will foot the bill from proposed tax amendments?

Treasury has been of the view that an uneven playing field exists between the unit trust industry and other industries.

Tertius Troost and Greg Boy - Moneyweb
Minister Nhlanhla Nene Appoints New Advisory Board of Government Pensions Administration Agency

[Govt of SA] The Minister of Finance has appointed a new Advisory Board for the Government Pensions Administration Agency (GPAA) which administers the payment of pensions on behalf of the Government Employees Pension Fund (GEPF) and National Treasury. The appointment was effective from 3 July 2018.

Tom Moyane Won't Be Prosecuted for Alleged Assault of Teen

[News24Wire] Suspended SARS commissioner Tom Moyane will not be prosecuted for the alleged assault of a 17-year-old girl, who is the mother of his grandchild, the National Prosecuting Authority (NPA) has confirmed.