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

Guide on mutual agreement procedures (Issue 2) and Minimum information requirements for MAP requests
SARS
Comprehensive guide to capital gains tax (Issue 7)

These guides are issued in terms of the Tax Administration Act, 2011. These guides are neither "official publications" as defined in the Act, nor are they binding on SARS. They are merely intended to assist taxpayers in the practical interpretation and application of the requirements set by law.

SARS
TAX OMBUD ANNUAL REPORT 2017/18

The Tax Ombud Annual Report 2017/18 has been tabled in Parliament and provides detailed activities and performance of the Office of the Tax Ombud in relation to the set Annual Performance Plan and objectives, as well as Judge Ngoepe’s overview of the institution in the past five years since its establishment on 1 October 2013.

Tax Ombud

TAX CASES

Kangra Group (Pty) Ltd v CSARS (A20/18) [2018] ZAWCHC 104 (27 August 2018)

Whether damages paid by the Appellant as a result of breach of contract, after it sold its coal business, is properly deductible in terms of section 11(a), specifically, whether such payment was incurred in the production of income.

SARS Court Cases
CSARS v Respublica (Pty) Ltd (1025/2017) [2018] ZASCA 109 (12 September 2018)

Value-Added Tax Act 89 of 1991 – whether the supply of a building and related goods and services to an educational institution for use by its students under a written agreement ...

SARS Court Cases
ABC (Pty) Ltd and C:SARS (Case number: 13879)

Under-declaration of gross income.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

VAT Panel: Recommendations on Zero Ratings in the Value-Added Tax System

The Value-Added Tax (VAT) rate was increased from 14% to 15% on 01 April 2018, as announced in the February 2018 National Annual Budget. Following the announcement of the VAT increase, concerns have been raised, in Parliamentary and other processes, about its impact on poor and low-income households. The increase in VAT would raise the tax on the poorest 50% of households by around R1.8 billion or an average of R216 per household per annum.

National Treasury
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

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)

Platform for Collaboration on Tax to discuss domestic resource mobilisation challenges on 9 October

The four partner organisations to the Platform for Collaboration on Tax (PCT) will discuss critical challenges and opportunities for mobilising domestic resources to meet countries' development priorities, at the upcoming IMF-World Bank annual meetings in Bali, Indonesia.

OECD
Tax Inspectors Without Borders making significant progress towards strengthening developing countries' ability to effectively tax multinational enterprises

An innovative international co-operation initiative that deploys qualified experts in developing countries to strengthen their ability to effectively tax multinational enterprises has achieved significant milestones over the past year, according to a new annual report.

OECD
Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS

In November 2016, over 100 jurisdictions concluded negotiations on the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting ("Multilateral Instrument" or "MLI")  that will swiftly implement a series of tax treaty measures to update international tax rules and lessen the opportunity for tax avoidance by multinational enterprises. The MLI already covers over 75 jurisdictions and will enter into force on...

OECD

CPD Events

PROFESSIONAL INSIGHT

Africa tax in brief

DEMOCRATIC REPUBLIC OF CONGO: Amendment of Mining Regulation publishedDecree No. 18/024, amending the Mining Regulation, was published in the Official Gazette on 12 June 2018. 

Celia Becker - ENSafrica
Punitive proposed amendment to South Africa’s transfer pricing provisions

Transfer pricing is a self-assessment mechanism that aims to ensure that taxpayers identify all potential cross-border transactions, operations, schemes, agreements or understandings that have been entered into between connected persons (referred to as “potentially affected transactions”), to ensure that all such potentially affected transactions have been concluded and implemented on an arm’s length basis. Ideally, where a taxpayer has been a participant to a potentially affected...

Jens Brodbeck, Jo-Paula Roman, Megan McCormack and Scott Salusbury - ENSafrica
Impact of China’s investment on the South African tax base

The news that China has committed to invest approximately R200-billion in South Africa was greeted with much fanfare throughout the country. Approximately ZAR33-billion of this will constitute a loan to Eskom, which is particularly good news given the funding requirements of the entity. A loan will also be advanced to Transnet in the amount of ZAR4-billion.

Peter Dachs - ENSafrica
Tax avoidance – when does it apply?

Groups of companies often wish to restructure or rationalise their operations. This generally involves a transfer of companies and/or assets between various entities. There are many commercial drivers for such transactions.

Peter Dachs - ENSafrica
Ruling on customer loyalty programme

The South African Revenue Service (SARS) recently published Binding Private Ruling 310, which deals with the tax treatment of a customer loyalty programme.

Heinrich Louw - Cliffe Dekker Hofmeyr
VAT on commercial and residential accommodation: Lodging, leasing or renting?

The Value-Added Tax Act, No 89 of 1991 (VAT Act) contemplates the supply of two types of residential accommodation, ie the supply of “commercial accommodation” and “dwellings”. The distinction between commercial accommodation and a dwelling is essential, because the supply of commercial accommodation is subject to VAT at the standard rate, whereas the letting and hiring of a dwelling is exempt from VAT. In addition, where commercial accommodation is supplied together with domestic goods or...

Gerhard Badenhorst - Cliffe Dekker Hofmeyr
No tax deduction for damages paid for deliberate breach of supply contract

South African courts have held, on a number of occasions, that taxpayers are entitled to deduct damages or compensation paid to third parties. However, this principle does not apply in all cases.

Ben Strauss and Jerome Brink - Cliffe Dekker Hofmeyr
National Treasury responds to public comments on the 2018 Draft Rates Bill

On 13 September 2018, National Treasury released a draft response document (Response Document), in response to comments received regarding the 2018 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill (Draft Rates Bill). The Draft Rates Bill was first released for public comment along with the 2018 Draft Regulations Prescribing Electronic Services and the Budget on 21 February 2018. The Response Document notes that National Treasury received 11 submissions related to the Draft...

Louis Botha - Cliffe Dekker Hofmeyr
Mapping out MAP procedures

On 25 July 2018, the South African Revenue Service (SARS) published its Guide on Mutual Agreement Procedures (Guide) as a general guidance on the Mutual Agreement Procedure (MAP), providing parameters in which competent authorities from the governments of contracting jurisdictions can interact with the intent to resolve international tax disputes.

Jessica Carr - Cliffe Dekker Hofmeyr

Tax News In The Press

Warning of second increase in VAT

With the new finance minister set to deliver the medium-term budget policy statement later this month, tax experts have warned of a likely increase in VAT in the coming year.

Noloyiso Mtembu - IOL
Tax survey highlights areas for service delivery improvements

A recent survey by PwC on the tax experience of more than 5 300 of its corporate clients with the South African Revenue Service (Sars) points to an expected increase in tax audits and disputes.

Amanda Visser - Moneyweb
Tax survey highlights areas for service delivery improvements

A recent survey by PwC on the tax experience of more than 25 300 of its corporate clients with the South African Revenue Service (Sars) points to an expected increase in tax audits and disputes.

Amanda Visser - Moneyweb
Tax Ombud’s office has come a long way

When advocate Eric Mkhawane first walked into the Office of the Tax Ombud about five years ago, he expected to find a fully functional operation.

Ingé Lamprecht - Moneyweb
Tax refunds: There are still issues, Ombud says

The Office of the Tax Ombud says it is not yet satisfied with the manner in which the South African Revenue Service (Sars) is dealing with delays with regard to tax refunds.

Ingé Lamprecht - Moneyweb
The rising tide of tax disputes

New research from Baker McKenzie, The Shape of Water: Tax Disputes in the Age of Intangible Value, shows that the amount of tax under dispute in Fortune 500 companies is equal to more than half of the profit growth in the Fortune 500.

Business Tech