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SARS NOTICE: MARCH 2018 VAT SUBMISSIONS

As you are aware the Minister of Finance announced an increase in the VAT rate from 14% to 15% as of 1 April 2018. The South African Revenue Service (SARS) would like to remind you that your March 2018 VAT201 submission is not affected by this change in the VAT rate. The March return you will receive on your SARS eFiling profile will be the same as the return you would have completed for February 2018, as well as any other VAT201 return which was due when the 14% VAT rate was still...

SARS
Size limit for the upload of supporting documents on eFiling increased

Taxpayers that have to upload supporting documents (relevant material) using eFiling should make sure the documents meet the standards and best practices.

SARS
Women in Tax Survey

This survey is closed. Thank you to all participants who took part in the survey and provided us with their valuable feedback. Look out for the results in the May/June 2018 edition of TaxTalk.

TaxTalk Magazine

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

VAT RATE INCREASE FROM 1 APRIL 2018 (NEW TAX FRACTION)

To assist you in preparing your VAT return (VAT201) submission, the South African Revenue Service (SARS) would like to bring the following to your attention: Click on the read more for full details.

 

SARS
BPR 302 Corporate restructuring and unbundling of listed shares

This ruling determines the tax consequences for the Applicant and the Coapplicants of the proposed corporate restructuring and unbundling of listed shares to shareholders.

SARS
SARS Mobile Tax Unit schedule – KZN Region

The South African Revenue Service will be visiting the areas listed below to assist taxpayers with the submission of income tax returns, eFiling, income tax registration and general enquiries on tax matters. The SARS mobile units schedules for May 2018:

SARS Operations

TAX CASES

ABC (PTY) LIMITED v CSARS - TCIT 13193 CPT (22 February 2017)

This appeal concerns the validity and the correctness of the additional assessments made by the Commissioner for the South African Revenue Service (‘the Commissioner’, ‘SARS’ or ‘the respondent’) on 2 December 2011 in respect of the income tax assessments for 2008 and 2009 of ABC (Pty) Ltd.

SARS Court Cases
Latest Constitutional Court Case

Interpretation of statutes — Value Added Tax Act — appropriateness of Judicial deference.

SARS Court Cases
Latest Tax Court Case

TCIT 13726 Port Elizabeth 13 February 2018.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Comment: Draft Rates and Monetary Amounts and Amendment of Revenue Laws “VAT” Bill

The Standing Committee on Finance and the Select Committee on Finance invites stakeholders and interested parties to submit written submissions on the Draft Rates and Monetary Amounts and Amendment of Revenue Laws “VAT” Bill.

Luvuyo Ngwayishe - Parliamentary Monitoring Group
The Davis Tax Committee concludes its work within 5 years

The Davis Tax Committee (DTC) is pleased to announce the publication of four more final reports and the conclusion of its work based on its Terms of Reference.

The Davis Tax Committee
Minister’s Speech at the SARS 2017/18 Preliminary Revenue Outcome Announcement
Treasury

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

​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
Income Tax Act, 1962  

Draft IN 93 (Issue 2) –​ The taxation of foreign dividends. Next due date for comments: 29 June 2018.

SARS
Income Tax Act, 1962  

Draft IN 93 (Issue 2) –​ The taxation of foreign dividends. Next due date for comments: 30 June 2018 New!​

SARS

International and Regional News
(OECD and ATAF)

Saint Lucia joins the Inclusive Framework on BEPS

The Inclusive Framework welcomes Mongolia, bringing to 114 the total number of countries and jurisdictions participating on an equal footing in the Project.

OECD
OECD invites public comments on the scope of the future revision of Chapter IV (administrative approaches) and Chapter VII (intra-group services) of the Transfer Pricing Guidelines

Public comments are invited on the future revision of Chapter IV, “Administrative Approaches to Avoiding and Resolving Transfer Pricing Disputes” of the Transfer Pricing Guidelines, and the future revision of Chapter VII, “Special Considerations for Intra-Group Services”, of the Transfer Pricing Guidelines.

OECD
Workers in OECD countries pay one quarter of wages in taxes

Workers in OECD countries paid just over a quarter of their gross wages in tax on average in 2017, with just over half of countries seeing small increases in the personal average tax rate, according to a new OECD report.

OECD

CPD Events

PROFESSIONAL INSIGHT

Time is running out for transfer pricing documentation compliance

In terms of the South African Income Tax Act, 1962 (the “Act”), transfer pricing adjustments are made in circumstances where multinational entities transact at prices that do not reflect prices expected to be charged if parties to the transaction were independent persons dealing at arm’s length. 

Limahl Sukhlal - ENSafrica
Revised debt reduction rules

The debt reduction provisions contained in section 19 of the Income Tax Act, 1962 (the “Act”) and paragraph 12A of the Eighth Schedule to the Act have been amended with effect from 1 January 2018 and are applicable to years of assessment commencing on or after that date. As a result of the changes, the ambit of these provisions has widened significantly, as discussed below, and the additional circumstances to the rules find application are worth noting. 

Annalie Pinch - ENSafrica
Rwanda’s new Income Tax Act and the taxation of share transfer transactions

April 2018 saw significant legal changes on the Rwandan business and tax scene, from the enactment of a new Companies Act (Law No 17/2018 of 13/04/2018 governing companies), to the enactment of Law No 016/2018 of 13/04/2018 establishing taxes on income (the “new Income Tax Act”). 

Dieudonné Nzafashwanayo - ENSafrica
E-filing and Submission of Tax Returns

Until 2007 taxpayers had no choice but to file paper-based tax returns with SARS. This required the completion of a paper-based return and also the submission of the taxpayers’ supporting documents and tax certificates. SARS then introduced e-filing, whereby taxpayers could register for e-filing and submit their tax returns electronically. With e-filing it is not possible to submit supporting documents when, for example, an individual files their tax return, the ITR12.

Dr Beric Croome - ENSafrica
Demand loans, prescription and tax

In South Africa, generally, debts prescribe within three years from the date on which they become due.  If a person advances money or credit to another person without a fixed date for repayment, unless the parties agree otherwise, the debt becomes due on the date of the conclusion of the agreement.  However, what is the position in the case of a so-called “demand loan”, that is, a loan agreement in terms of which the creditor has the power – by making demand – to unilaterally determine when...

Ben Strauss - Cliffe Dekker Hofmeyr
Common misconceptions: Tax treatment of directors' fees derived by non-residents

Many non-residents that derive directors' fees from a South African tax resident company believe that because they are non-resident and pay tax in their country of residence on such directors' fees they are not liable to tax in South Africa. This is a common misconception as non-residents remain taxable on South African sourced income (subject to tax treaty relief).

Leani Nortje - Webber Wentzel
Hybrid Equity Instruments: Redemption versus repurchase

Section 8E of the Income Tax Act, 1962 (the Act) applies to inter alia deem a share to be a hybrid equity instrument if certain requirements are met, with the result that otherwise exempt dividends paid in respect of that share are deemed to be fully taxable income.

Leani Nortje - Webber Wentzel
Procedure is everything: A win for the taxpayer and the importance of the right to just administrative action

In recent times, taxpayers have often been unsuccessful in their disputes with the South African Revenue Service (SARS), especially where the dispute involved the interpretation or application of the substantive provisions of tax legislation. 

Louis Botha - Cliffe Dekker Hofmeyr
Status of SARS interpretation notes

From time to time, the South African Revenue Service (SARS) issues interpretation notes. According to the SARS website (www.sars.gov.za), interpretation notes “are intended to provide guidelines to stakeholders (both internal and external) on the interpretation and application of the provisions of the legislation administered by the Commissioner”.

Ben Strauss - Cliffe Dekker Hofmeyr

Tax News In The Press

Corruption Watch Questions NPA's 'Reluctance' to Prosecute Tom Moyane

[News24Wire] Corruption Watch said the National Prosecuting Authority (NPA) told the organisation that it is reviewing its decision not to prosecute Tom Moyane.

Still some way to go for greater international tax transparency

As most reporting entities and clients have not realised the magnitude of the implementation of the new legislation.

Amanda Visser - Moneyweb
15 May 2018 - North Gauteng High Court granted an order to give effect to a settlement agreement between SARS and senior SARS official Mr Vlok Symington
SARS News
Problems persist with the VCC tax initiative

Stakeholders have requested a ‘review and redesign’ of the VCC regime to meet its initial objectives.

Amanda Visser - Moneyweb
Two Million in Foreign Currency Seized At Cape Town International Airport

[News24Wire] South African Revenue Services (Sars) custom officials have confiscated almost R2m in foreign currency hidden in the luggage of a man heading to Dubai from Cape Town International Airport.

Treasury Calls for Written Submissions On VAT Zero-Rated Items

[Govt of SA] The Independent Panel of Experts to review the current list of VAT zero-rated items: Call for submissions