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SAIT Trending Topics

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

VACANCY: CHIEF EXECUTIVE OFFICER

The Tax Ombud is currently recruiting for a Chief Executive Officer. The successful candidate will be required to understand the Tax Ombud’s mandate, strategic objectives and all relevant tax legislations. The candidate will also be required to formulate the OTO’s business model and align it with the overall organisational strategy.

Tax Ombud
CEO OF THE OFFICE OF THE TAX OMBUD LEAVES OFFICE AT THE END OF APRIL 2019

Advocate Hanyana Eric Mkhawane, the CEO of the Office of the Tax Ombud, will be leaving the office at the end of April 2019 to return to his practice as an advocate at the Johannesburg Bar. Adv. Mkhawane was recruited by the then Minister of Finance, Pravin Gordhan, out of his practice to come and help Tax Ombud Judge Bernard Makgabo Ngoepe to set up the office. “He performed this task with distinction,” said the Judge. At the request of Judge Ngoepe, Adv. Mkhawane stayed longer than he had...

Tax Ombud
Planned industrial action at SARS

Dear Stakeholders

The South African Revenue Service (SARS) and Organised Labour have been engaged in wage negotiations and despite extensive deliberations between parties to resolve matters, it will appear as if the wage deadlock has not been resolved to avert the strike action on Thursday 28 March. SARS acknowledges that a strike is a constitutional right and will continue its efforts to find an amicable resolution to avert the strike. The organisation has nonetheless activated its...

SARS

TAX CASES

TCIT 13988 CPT 1 November 2018

Income tax; section 24C; loyalty programme; whether the Appellant was entitled to a section 24C allowance in respect of a loyalty programme it administered

SARS Court Cases
ABC (Pty) Ltd and C:SARS (IT14426) - 13 December 2018

This appeal is concerned with the application of provisions of the Employment Tax Incentive Act 26 of 2013 (the Act), which provides for an employment tax incentive (“ETI”) in the form of a deduction from the employees’ tax (“PAYE”) payable to the employer to support the creation of new jobs for employees under the age of 30 years.

SARS Court Cases
Tax Payer v Commissioner for the South African Revenue Service (VAT1558) [2018] ZATC 3 (5 December 2018)

This matter is concerned with the interpretation and application of s 8(15) of the Value-Added Tax Act 89 of 1991 (‘the Act’). It takes the form of an appeal against additional Value-Added Tax (‘VAT’) assessments raised by the respondent, the Commissioner for the South African Revenue Service (‘CSARS’), against the appellant, …, in the amount of R3 444 764 for its 06/2009, R4 631 620 for its 06/2010 and R5 932 209 for its 06/2011, VAT periods and interest.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Edward CHR Kieswetter CV
Treasury
Nugent Commission Report pages 197 and 198
Treasury
Consolidated Regulations After Amendments to Regulations: Electronic Services for the Purpose of the Definition of "Electronic Services" in Section 1(1) of the Value-Added Tax Act
Treasury

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

Media Statement and related documents: Publication of the Draft Carbon Tax Bill for public comment

The Minister of Finance recently announced the implementation of the carbon tax effective from 1 June 2019. The Draft Carbon Tax Bill makes provision for the carbon offset allowance in terms of Section 13. The National Treasury today publishes the Draft Regulation on the Carbon Offset for a second round of public comment and further consultation. Next due date for comments: 14 December 2018

National Treasury
Inviting technical tax proposals for Annexure C of the 2019 Budget Review

National Treasury invites taxpayers, tax practitioners and members of the public to submit tax proposals of a technical nature (and not of a policy nature) to be considered for possible inclusion in Annexure C of the 2019 Budget Review. Next due date for comments: 23 November 2018.

SARS & National Treasury
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

International and Regional News
(OECD and ATAF)

OECD invites public comments on draft report on tax morale

As part of the ongoing work on tax morale, the OECD is seeking public comments on its forthcoming publication What's driving tax morale? An empirical analysis on social preferences and attitudes towards taxation. A first draft was presented and discussed at a conference on the Role of Tax Morale in Developing Countries organised by the OECD's Task Force on Tax and Development on 25 January 2019. The conference provided further inputs that have been included in this version for...

OECD
Luxembourg deposits its instrument of ratification for the Multilateral BEPS Convention

This document contains a list of signatories and parties to the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting. Under the provisions of the Convention, each jurisdiction is required to provide a list of reservations and notifications (the “MLI Position”) at the time of signature.

OECD
OECD to release Taxing Wages 2019 on Thursday 11 April

Taxing Wages 2019, the OECD’s annual flagship publication on the various taxes levied on wages and salaries in OECD countries, will be released on Thursday 11 April at 11:00 CET (09:00 GMT).

OECD

CPD Events

PROFESSIONAL INSIGHT

Reportable arrangement: proposed reporting burden on mining companies and rehabilitation trusts

The reportable arrangement provisions were established by the South African Revenue Service (“SARS”) with the objective of obtaining information on certain types of transactions. The circumstances under which a person should report an “arrangement” to SARS, as defined in section 34 of the Tax Administration Act, 2011 (the “TAA”), are contained in sections 34 to 39 of the TAA. Essentially, if an arrangement has certain characteristics as listed in section 35(1) of the TAA or if SARS has...

Kristel van Rensburg and Emile Cronje - ENSafrica
A creature of statute: A decision about the Tax Court’s power to increase understatement penalties

In the recent judgment of Purlish Holdings (Proprietary) Limited v The Commissioner for the South African Revenue Service (76/18) [2019] ZASCA 04, the Supreme Court of Appeal (SCA) had to pronounce on the South African Revenue Service’s (SARS) entitlement to impose understatement penalties on Purlish Holdings (Proprietary) Limited (Taxpayer) and the quantum thereof.

Louis Botha & Louis Kotze - Cliffe Dekker Hofmeyr
Africa tax in brief

AFRICA: African Continental Free Trade Area Agreement developments

Celia Becker - ENSafrica
PWC Tax Alert: Interests in foreign companies held by SA residents via foreign trusts: New anti-avoidance measure

Since as far back as 2008, government has been concerned that the controlled foreign company (“CFC”) rules do not cater for situations where South African residents hold shares in foreign companies via foreign trusts. As part of a set of legislative measures to address this concern, the participation exemption (an exemption available in respect of foreign dividends if at least 10% of the total equity shares and voting rights in the company declaring the foreign dividend are held) is, with...

PWC
The proposed amendments regarding dividend stripping rules in the 2019 Budget

In our Special Edition Budget Speech Alert 2019, we discussed, among other things, National Treasury’s (NT) proposal to address abusive arrangements aimed at avoiding the anti-dividend stripping provisions in the Income Tax Act, No 58 of 1962 (Act). The purpose of this article is to delve into this issue in a...

Louis Botha - Cliffe Dekker Hofmeyr
When must reportable arrangements be disclosed to SARS?

Under the Tax Administration Act (28/2011), persons who enter into certain types of transaction must report the details of those transactions to the South African Revenue Service (SARS). These types of transaction are called 'reportable arrangements'.

Ben Strauss - Cliffe Dekker Hofmeyr
VAT deductions by holding companies

We look at the position of companies that acquire subsidiaries when it comes to the deductibility of VAT inputs in different scenarios.

Gerhard Badenhorst - TaxTalk Magazine
How to complete your provisional tax return

With the deadline for second provisional tax returns and payments fast approaching, we provide you with information and tips to help you prepare in good time.

Nicci Courtney-Clarke - TaxTalk Magazine
Webber Wentzel E-Alert: Budget Review 2019

The Budget Review 2019 (Budget) was released by the National Treasury this afternoon. Chapter 4 and Annexure C of the Budget introduce on a high-level changes to tax policies or tax clarifications that would be implemented in the draft taxation law and tax administration law amendment bills to be circulated mid-2019. In this e-alert, we discuss some of the notable points in Chapter 4 and Annexure C.

Webber Wentzel

Tax News In The Press

Our heavy tax burden

The amount we pay in indirect taxes can equal the amount we pay in income tax, effectively doubling the average taxpayer’s tax rate.

Adriaan Kruger - Moneyweb
Harvesting low-hanging fruit will not lift Sars out of the doldrums

Internal cracks were developing before Moyane.

Barbara Curson - Moneyweb
Sars: Now we start picking up the pieces

The painful process of fixing Sars and regaining taxpayer trust must start with cold hard facts.

Ingé Lamprecht - Moneyweb
Sars: No quick fix for legacy of ‘disastrous’ few years

Weak economic growth, lower compliance levels, efforts to reduce the Vat refund backlog and internal challenges have seen the South African Revenue Service (Sars) miss its revised revenue collection target by R14.6 billion.

Ingé Lamprecht - Moneyweb
New SARS boss: ‘I hope to reignite that flame of hope from the flicker of despair’

Edward Kieswetter will walk into a demoralised SARS when he begins work on May 1. In an interview, he says his three priorities will be getting staff back on board, winning back the hearts of the South African people and presenting a turnaround plan for the beleaguered revenue service.

Ruan Jooste - Daily Maverick
  ASK AN ADVISOR

If I bequeath my living annuity to a grandchild, I believe he has to receive an income from it (monthly or otherwise). Assuming that he is still a minor at the time of my death, what will the tax implications be? Will he be able to register as a taxpayer and pay tax on this ‘pension’ in his own right, or will the income be added to his father’s income, resulting in it being taxed at his father’s marginal rate?

Wouter Fourie