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SAIT Trending Topics

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
Regional Representatives

As part of our continued effort to serve our members, SAIT regularly meets with SARS representatives at a regional and national level to raise pertinent operational issues affecting the tax community.  SAIT has enlisted volunteer representatives in each of the 13 regions to act on behalf of the Institute at these meetings.  As a member, you are able to raise your SARS related issues with us upon receipt of a Call for Comments relevant to your region.

SAIT Technical
PAGSA Newsflash 2018-14: UIF Declaration Changes Delayed

During 2017, a number of communications (PAGSA Newsflashes 201737, 201740, 201803 and PAGSA Newsletter 201801) were issued to inform you of the amendments to the Unemployment Insurance Act, as well as the intention that the current E03 Declaration specification that payrolls must comply with to create the monthly declaration file for submission to the Fund, will be changed to accommodate the new requirements resulting from the amendments.

Payroll Authors Group of South Africa

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

IN3 - Resident definition natural person ordinarily resident

The income tax system in South Africa changed from a source-based system of taxation to a residence basis of taxation with effect from years of assessment commencing on or after 1 January 2001. The consequential amendments to the Act have the effect that South African residents are, but for certain exclusions/exemptions, subject to income tax on their worldwide income, i.e. income derived within and outside South Africa.

SARS
Draft guide on venture capital companies

One of the main challenges facing small and medium-sized businesses, as identified in the 2008 South African National Budget Review, is the difficulty in accessing equity finance. Equity financing is essentially a method used by companies to raise capital by issuing company shares to investors. A share in relation to a company means any unit into which the proprietary interest in the company is divided.1 The holder of the share does not own the assets of the company, but owns the rights in...

SARS
BPR 304 Debt reduction and subsequent liquidation of debtor

This ruling determines the income tax consequences of the settlement of a loan by way of set-off from the outstanding subscription price of a new issue of additional shares and the subsequent liquidation of the issuer.

SARS

TAX 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
Commissioner for the South African Revenue Service v Char-Trade 117 CC t/a Ace Parking (776/2017) [2018] ZASCA 89 (31 May 2018)

Assessment issued for secondary tax on companies (STC) – S 64B and 64C of the Income Tax Act – Commencement of prescription – S 99 of the Tax Administration Act   Prescription commences to run against CSARS when return for STC is submitted by the taxpayer - Return for STC never submitted by taxpayer – Prescription never commenced  to run against CSARS – Assessment confirmed.

SARS Court Cases
Commissioner for the South African Revenue Service v KWJ Investments Service (Pty) Ltd (466/2017) [2018] ZASCA 81 (31 May 2018)

Gross income – whether a cession of a dividend right constitutes a receipt or accrual for the purposes of gross income – if so, does a practice generally prevailing in terms of provision (iii) to s 79 (1) of the Income Tax Act 58 of 1962 apply.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Latest Published Government Gazette

Click here to read the latest published goverment gazette.

Ivy Botopela - Government Printing
Latest Published Government Gazette

Click here to read the latest published goverment gazette.

Esna Mostert - Government Printing
Media Statement: Amendment to the terms of reference for the Independent panel of experts for the review of current list of VAT zero rated food items

On 25 April 2018, the Minister of Finance published the Terms of Reference for the Independent Panel of Experts to review the current list of zero-rated items, and consider the most effective way to mitigate the impact of the increase in the VAT rate on poor and low-income households. Following hearings in Parliament on 25 April 2018, and the concerns regarding the scope of work and the composition of the Panel as expressed at the hearings or thereafter by letter from some civil society...

National Treasury

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

Tax Administration Act, 2011​

Dispute resolution rules in terms of section 103 of the Tax Administration Act, 2011. Next due date for comments: ​26 June 2018 New!

SARS
Call for Submissions - The independent panel of experts to review the current list of vat zero-rated items

On 25 April 2018, the Minister of Finance published the Terms of Reference for the Independent Panel of Experts to review the current list of zero-rated items, and consider the most effective way to mitigate the impact of the increase in the VAT rate on poor and low-income households. Next due date for comments: 24 May 2018 New!

National Treasury
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

International and Regional News
(OECD and ATAF)

OECD and IGF invite comments on a draft toolkit that will help developing countries to identify and cost potential behavioural responses by mining investors to tax incentives

This draft toolkit has been prepared by the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), under a programme of co-operation with the OECD, to help governments anticipate and limit the cost of mining tax incentives. It is part of wider efforts to address some of the challenges developing countries are facing in raising revenue from their mining sectors.

OECD
OECD launches programme in Ouagadougou to support Burkina Faso in implementing new international tax standards

Today, in Ouagadougou, an OECD delegation met the Minister of Economy, Finance and Development of Burkina Faso, Mrs. Hadizatou Rosine Coulibaly, to discuss the progress made in the implementation of new international tax standards.

OECD
Reshaping the Personal Income Tax in Slovenia

This report presents a tax reform package that prepares Slovenia for the ageing of its population. Slovenia faces a window of opportunity for a comprehensive tax reform that rebalances the tax mix away from employee social security contributions (SSCs) towards the personal income tax (PIT).

OECD

CPD Events

PROFESSIONAL INSIGHT

Unforeseen tax impact in amendments to articles of association

The recent Supreme Court of Appeal judgement of CSARS v The Executors of Estate Late Sidney Ellerine illustrates the importance of obtaining tax advice where rights, privileges or conditions of shares may potentially be affected by amendments to the memorandum of incorporation of a company.

Joon Chong & Daniel Kirk-Cohen - Webber Wentzel
tax revenews | issue 6

The latest Supreme Court case law and SARS publications.

by the ENSafrica tax department
Forex gains and losses a no brainer?

Given the volatility of the South African Rand against other major trading currencies, it is highly likely that any company that has significant cross border related party transactions and balances will also have material realised and unrealised foreign exchange gains and losses. 

AJ Jansen van Nieuwenhuizen - Transfer Pricing
Arm’s length range – what does it really mean?

In South Africa, it seems that the unspoken rule is that the interquartile range (IQR) is the arm’s length range. To qualify this statement, I am only referring to a margin derived from a benchmarking study that uses external comparables.

Marcus Stelloh - Transfer Pricing
Non-submission of transfer pricing documentation is an incidence of non-compliance

It has long been the position that there are no specific penalties for the non-submission of tax returns and accompanying schedules for corporate taxpayers. Whilst Section 210 and 211 of the Tax Administration Act (TAA) provides for the imposition of penalties, in respect of corporate taxpayers, this would not apply until such time as SARS issues a notice to give effect to this.

Karen Miller and Carryn Alexander - Webber Wentzel
Securities lending arrangements back in the spotlight

Recently the South African Revenue Service (SARS) issued Binding Private Ruling 301 dated 20 April 2018 (Ruling) which determined whether a South African sourced dividend received by a borrower in terms of a securities lending arrangement should be included in the “income” of the borrower and whether any related securities lending expenditure would be deductible.

Jerome Brink - Cliffe Dekker Hofmeyr
Efficient or inept? South Africa’s corporate income tax rate and restructuring rules

As indicated in our Tax and Exchange Control Alert published on 13 April 2018, the Davis Tax Committee (DTC) released a media statement on 12 April 2018 in which it announced the publication of four additional final reports and conclusion of its work based on its Terms of Reference. 

Candice Gibson - Cliffe Dekker Hofmeyr
The winding and costly road of the VAT rate increase

We look at the impact of the VAT rate increase, the reality of implementing the increase and its impact on a business’s profitability.

Lesley O’Connell - PWC for TaxTalk Magazine
The VAT increase and overcoming tax technology challenges

An increase of 1% in the standard VAT rate was announced during the February budget speech. With an implementation date of 1 April 2018, businesses were hard pressed to make the IT changes necessary to implement the new rate on time. Our authors highlight the importance of coordinating information technology with the overall business strategy.

Madelein van Zyl & Eugene Buitendach - KPMG for TaxTalk Magazine

Tax News In The Press

What happens if your tax isn’t paid over to Sars?

Employees should ensure that they receive their tax certificates (IRP5) from their employers in time for the annual filing season as it reflects how much tax they have already paid.

Amanda Visser - Moneyweb
State Refuses to Disclose Parts of 'Project Sunday Evenings' Docket to SARS Trio

[News24Wire] Prosecutors have yet to disclose the full docket to defence attorneys for three former South African Revenue Service (SARS) officials accused of illegally bugging the National Prosecuting Authority's (NPA) head office in 2007.

Nene extends Acting Sars Commissioner’s term

Finance minister Nhlanhla Nene has renewed the term of the acting commissioner of the South African Revenue Service (Sars) by 90 days.

Ingé Lamprecht - Moneyweb
The Latest Customs Requirements for SA Resident Travellers

[Lesotho Times] SARS has issued a media release for South African resident travellers returning to South Africa with personal effects such as laptops, iPads, cell phones, golf clubs, cameras and/or other personal valuables. Sars is attempting to clarify what they quaintly refer to as "confusion in the media" in regard to the SA resident who recently had to pay R1 500 at customs for his laptop, when he couldn't produce proof of purchase.

In an Affidavit, the Presidency and Pravin Gordhan Hit Back Hard At Tom Moyane

[Daily Maverick] Pravin Gordhan is the deponent of the affidavit in the Presidency's case against suspended tax boss Tom Moyane. The charges against the SARS Commissioner are factual, devastating and devoid of speculation - specifically designed, Scorpio is told, to give Moyane no wriggle room, and no chance to successfully challenge the allegations.

Acting Sars commissioner’s 90-day term runs out soon

But Moyane’s disciplinary process will likely delay permanent appointment.

Ingé Lamprecht - Moneyweb