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SAIT Trending Topics

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

REQUEST FOR SUBMISSIONS: REVIEW IN TERMS OF S16(1)(B OF THE TAA 2011 (SUBMISSION DEADLINE HAS BEEN EXTENDED TO 14 DECEMBER 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
Table 3 – Rates at which interest-free or low interest loans are subject to income tax has been updated

The term “official rate of interest” is defined in section 1(1) of the Income Tax Act 58 of 1962 (the Act) Where a loan is obtained by an employee from his or her employer in terms of which no interest is payable or where the interest payable is less than the “official rate of interest”, the difference between the amount which would have been payable if the loan was granted at the official rate and the amount actually paid by the employee, is taxed as a fringe benefit.

SARS
ABC of capital gains tax for companies (Issue 8)

Capital gains tax (CGT) was introduced in South Africa with effect from 1 October 2001 and applies to the disposal of an asset on or after that date. Internationally, the idea of such a tax is not uncommon, with many of South Africa’s trading partners having implemented CGT decades ago. All capital gains and losses made on the disposal of assets are subject to CGT unless specifically excluded. The CGT provisions are contained in the Eighth Schedule to the Income Tax Act 58 of 1962 (the Act...

SARS

TAX CASES

Sasol Oil v CSARS (923/2017) [2018] ZASCA 153 (9 November 2018)

Contracts for the sale of crude oil by one entity within the Sasol Group, to another, and the back to back sale of the same oil to yet another entity in the group, were not simulated in order to avoid a liability to pay tax; nor were they entered into solely for the purpose of avoiding the payment of tax for the purpose of s 103(1) of the Income Tax Act 58 of 1962.

SARS Court Cases with compliments of Webber Wentzel
Commissioner for the South African Revenue Service v Digicall Solutions (Pty) Ltd (927/2017) [2018] ZASCA 137 (28 September 2018)

Income Tax Act 58 of 1962 – s 103(2) – taxpayer company – successive changes in shareholding in consecutive tax years – sole purpose from time of first change in shareholding to preserve and utilise assessed loss for set-off against future income – assessed loss carried over to next tax year – second acquisition of shares – income thereafter received by taxpayer – income indirect result of first acquisition of shares – set-off of assessed loss against income disallowed.

SARS Court Cases
C:SARS v Volkswagen S A (Pty) Ltd (1028/2017) [2018] ZASCA 116 (19 September 2018)

Income tax – valuation of stock at year end – s 22(1)(a) of Income Tax Act 58 of 1962 – whether stock to be valued in accordance with International Accounting Standard 2 (IAS 2 or AC 108) at net realisable value.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Comments & public hearings: 2018 Medium Term Budget Policy Statement (MTBPS)

The Standing Committee on Finance and the Select Committee on Finance invites you to submit written submissions on the 2018 Medium Term Budget Policy Statement (MTBPS) that will be tabled on 24 October 2018. Click here to read more.

Parliamentary Monitoring Group
Draft Response documents on the 2018 draft tax bills

The National Treasury today publishes the draft Taxation Laws Amendment Bill, 2018 (TLAB) and draft Tax Administration Laws Amendment Bill, 2018 (TALAB). The TLAB and TALAB include the legislative amendments for the more complex tax proposals that were announced in the 2018 Budget Review on 21 February 2018.

National Treasury
Speech by Minister of Finance Mr. Nhlanhla Nene 2018 Tax Indaba

It is my honour to give this opening address to the 2018 Tax Indaba. Tax policy and tax administration are not usually seen as especially interesting topics in the eyes of the general public, but that has certainly changed after the events of the past few years.

National Treasury

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

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
Draft public notice relating to the incidences of non-compliance by a person in terms of section 210(2) that are subject to a fixed amount penalty in accordance with section 210 and 211

The incidences of non-compliance, that are subject to a fixed amount penalty in accordance with section 210(1) and 211 of the Act, are listed for public comment.Next due date for comments: 30 October 2018

SARS
​Income Tax Act, 1962

Draft list of qualifying physical impairment or disability expenditure & Draft ITR-DD Form – Confirmation of Diagnosis of Disability. Next due date for comments: 5 November 2018

SARS

International and Regional News
(OECD and ATAF)

OECD Pensions Outlook 2018

The 2018 edition of the OECD Pensions Outlook examines how pension systems are adapting to improve retirement outcomes. It focuses on designing funded pensions and assesses how different pension arrangements can be combined taking into account various policy objectives and risks involved in saving for retirement.

OECD
At G20 Summit OECD’s Gurría says collective action vital to tackle global challenges

International cooperation and collective action are critical to tackling the world’s major challenges, OECD Secretary-General Angel Gurría said following the G20 Leaders’ Summit held in Buenos Aires amid heightened trade tensions but at which important advances were made on a number of priorities of Argentina’s presidency.

OECD Secretary-General tax report - G20 Leaders Argentina

This report contains two parts. Part I reports on the activities and achievements in the OECD’s international tax agenda. Part II reports on the activities and achievements of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

CPD Events

PROFESSIONAL INSIGHT

Important judgment on simulation handed down by Supreme Court of Appeal

On 9 November 2018, the South African Supreme Court Appeal (“SCA”) handed down an important judgment in which it upheld Sasol Oil (Pty) Ltd’s appeal against a judgment of the Gauteng Tax Court. The facts of the case were complex, but concerned certain back-to-back supply transactions entered into by a number of entities, including Sasol Oil, which the South African Revenue Service (“SARS”) contended were simulated. An Isle of Man company in the Sasol group (“SOIL”) sold oil to a UK group...

By the ENS tax department
Practical considerations in managing transfer pricing across Africa

Applying globally determined transfer pricing policies can be challenging on the African continent, with its diverse markets and unusual business models. Our authors review the challenges of being compliant in a shifting landscape.

Michael Hewson & Lisa Di Domenico for TaxTalk Magazine
Transfer pricing observations and reflections

Our article provides the perspective of a relative newcomer to Africa on the transfer pricing scene in our continent.

Marius Leivestad for TaxTalk Magazine
Transfer pricing: Evolution or revolution?

This article takes a brief walk down memory lane on the evolution of transfer pricing in South Africa with respect to the legislation and audits, and looks at future developments we can possibly anticipate.

Nishana Gosai for TaxTalk Magazine
Transfer pricing for financial transactions: Expect significant changes

A discussion draft recently published by the OECD could mean significant changes to transfer pricing when it comes to loans and guarantees, cash pooling and captive insurance within groups of companies. Our author gives advice on timeous preparation of the documentation required to support a position taken.

Okkie Kellerman for TaxTalk Magazine
South Africa & Africa: Transfer Pricing Documentation in a Post-BEPS World

Our article guides you through all the recent developments in transfer pricing documentation requirements in South Africa and the rest of Africa.

Christian Wiesener for TaxTalk Magazine
The risks of refunds

This article looks at when a taxpayer is entitled to a refund, when SARS can refuse to pay a refund and the remedies available to taxpayers in the face of such a refusal.

Natasha Wilkinson for TaxTalk Magazine
The Assign Services case: Its effect for the “employer”

A recent judgment of the Constitutional Court pronounced on whether workers in some circumstances are employees of a labour broker or of the company where they are placed. We look at the implications in terms of the Fourth Schedule.

Advocate Kevin Burt for TaxTalk Magazine
Managing your Tax Compliance Status

Manual tax clearance certificates have been replaced with a tax compliance status functionality on eFiling. How well does the My Compliance Profile work? And what can one do in case of problems? Our authors explore the issue in detail.

Joon Chong & Carryn Alexander for TaxTalk Magazine

Tax News In The Press

Slow reform at Sars to trigger 'another year of unimpeded tax fraud'

The slow pace of reform at the South African Revenue Service (Sars), together with February’s expected tax increases, have awarded another year of unimpeded tax fraud to illegal cigarette companies registered by Sars. This is according to chairperson of the Tobacco Institute of Southern Africa, François van der Merwe, who said until government was able to collect taxes from those who evade paying, it should think extremely carefully about increasing taxes again on the legal market.

Sizwe Dlamini - IOL
23 November 2018 - SARS crushes 26 illegal vehicles in war on non-compliance
South African finance minister tables carbon tax bill

Finance Minister Tito Mboweni recently tabled the carbon tax bill in Parliament, giving effect to the announcements made in the 2017 and 2018 Budget statements. The carbon tax will become effective from 1 June 2019. The Government News Agency quoted Mboweni as stating that: “Climate change poses the greatest threat facing humankind, and South Africa intends to play its role in the world as part of the global effort to reduce greenhouse gas emissions.”

ESI Africa
Law Matters: Is SA side-stepping the uprising of Cryptocurrencies?

Are Treasury and the Reserve Bank side-stepping the uprising of Cryptocurrencies? Cryptocurrency has gained significant traction in the past few years and has become a risky, but potentially lucrative, investment or trading option. South Africa has been a bit slow on the uptake in regulating the use of cryptocurrencies and, for the most part, their use been unregulated. 

Wade Ogilvie and Arnold Mbeje - IOL
Corporate taxpayers pulling their weight easy targets for Sars

While many South African businesses are either not registered for tax or are paying next to no tax, the South African Revenue Service (Sars) is taking a shotgun approach to attacking large tax-compliant corporates, which it seems to see as easy targets.

Kelly Wright - Moneyweb
20 November 2018 - SARS intensifies campaign to reinforce tax compliance