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PAGSA Newsflash 10-2018: Youth Employment Service Initiative (YES)

In the words of our State President, “youth unemployment … is perhaps the greatest and most pressing social and economic challenge facing our country at this moment in our history”. To address these concerns, the Employment Tax Incentive was launched in January 2014 to reduce the cost to employers of hiring young people.  

Rob Cooper
FEATURED: 2018 Employees Payroll Taxes

Payroll taxation can adversely impact the lifeblood of any business. Even one small deviation can trigger a huge liability because the deviation typically has a repetitive effect. This session covers the latest developments in payroll taxation at a legislative, interpretative and operational level. It also includes recurring pitfalls and issues of potential dispute.

 

Tarryn Atkinson (Head of Employees’ Tax and Benefits - FirstRand Bank Limited) will present in the following...

SAIT CPD
SARS FAQs on the VAT rate increase

In the Minister’s Budget speech on 21 February 2018, an increase in the standard rate of VAT was announced. The rate increase applies from 1 April 2018. The Frequently Asked Questions (FAQs) in this document have been compiled on the basis of questions that vendors and the public at large are likely to have about the implications of the rate increase.

SARS

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

SARS Mobile Tax Unit schedule

The SARS mobile units schedules for April 2018:

Guide on the Determination of Medical Tax Credits (Issue 9)
BPR 299 Dividend distribution

This ruling determines the income tax consequences for a company that makes dividend distributions to its holding company.

TAX CASES

Latest High Court Judgment

L Taxpayer v Commissioner for the South African Revenue Service (A124/2017) [2018] ZAWCHC 23 (27 February 2018):  This is an appeal in terms of s 133 of the Tax Administration Act against the judgment of the Tax Court handed down on 13 December 2016 in which it upheld the disallowance by SARS of interest deductions claimed by the taxpayer in respect of the 2010 to 2012 years of assessment.

Latest Tax Court Judgment
SARS
High Court (Full Bench) - SARS and Short and Another CPT
SARS

Legislative & Policy
(National Treasury & Parliament)

Media Statement: Publication for Comment on the Draft Foreign Member Funds Framework

The National Treasury (NT) today publishes for comment the Foreign Member Funds Framework to be declared by the Minister of Finance in terms of the Collective Investment Schemes Act (Act 45 of 2002).

Treasury
Media Statement: Appointment of Mark Kingon as acting Commissioner for the South African Revenue Service
Treasury
SAIT comments on Second Draft Carbon Tax Bill

We set out our high-level comments on the Second Draft Carbon Tax Bill (Bill) in this submission. Please click here to read more.

SAIT Tax Policy

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

Tax Administration Act, 2011​

Draft IN 15 (Issue 5) – Exercise of discretion in case of late objection or appeal. Next due date for comments:​ 31 March 2018

SARS
Income Tax Act, 1962​

Draft IN on section 18A: Audit certificate. Next due date for comments: 30 April 2018

SARS
​Income Tax Act, 1962

Draft IN on lease premiums. Next due date for comments: ​11 May 2018

SARS

International and Regional News
(OECD and ATAF)

OECD releases 14 additional country profiles containing key aspects of transfer pricing legislation

The OECD has published 14 new and 2 updated transfer pricing country profiles, reflecting the current transfer pricing legislation and practices of participating countries. The country profiles, which are now available for 44 countries, contain up-to-date and harmonised information on key aspects of transfer pricing legislation, provided by countries themselves.

OECD
Enhancing the taxation of personal savings and wealth to support more inclusive growth - Two new OECD reports launch at 9:00 GMT / 05:00 EST on Thursday 12 April 2018 Webinar at 14:00 GMT / 10:00 EST

Taxes are among the most effective tools governments have for reducing inequalities and bringing about more inclusive growth.

OECD
Global network for the automatic exchange of offshore account information continues to grow; OECD releases new edition of the CRS Implementation Handbook

Today, the OECD published a new set of bilateral exchange relationships established under the Common Reporting Standard Multilateral Competent Authority Agreement (CRS MCAA) which for the first time includes activations by Panama. The OECD also released the second edition of the Common Reporting Standard Implementation Handbook.

OECD

CPD Events

PROFESSIONAL INSIGHT

Uncertainty Amongst Some VAT Vendors: What You Need to Know

We have recently noted the uncertainty amongst some VAT vendors regarding what rate of VAT to levy on some of their supplies in light of the VAT increase from 14% to 15%, which will be effective from 1 April 2018.

Andrew Staude & Anton Lockem - Shepstone & Wylie
Tax treatment of excessive debt financing under review

Malusi Gigaba stated in the Budget Review 2018 (Budget) that: "The deductibility of interest payments on debt acts as an incentive to use debt rather than equity funding, and can be used to strip profits from high tax countries."  He goes further by stating that "[a] discussion document inviting comments will soon be published to facilitate public consultation".

Joon Chong & Karen Miller - Webber Wentzel
Interaction between share buyback and corporate rules to be reviewed

There have been various amendments to the Income Tax Act 58 of 1962 (ITA) targeting the perceived abuse of share buybacks and dividend stripping arrangements since 2011. 

Joon Chong & Brian Dennehy - Webber Wentzel
The tax implications of fruitless and wasteful expenditure

One of the proposals in the Budget Review 2018 (Budget) to preserve a sustainable tax base is to disallow fruitless and wasteful expenditure by government entities. 

Yashika Govind & Rudi Katzke - Webber Wentzel
Cryptocurrency transactions

In South Africa, as with most other countries around the world, there is no guidance and regulation regarding cryptocurrencies such as Bitcoin. The Budget Review 2018 (Budget) proposes that the income tax and value-added tax (VAT) legislation be amended to deal with cryptocurrencies, which pose a risk to the South African tax system. Given the current Budget deficit, the imposition of taxes on cryptocurrencies would assist the South African Revenue Service (SARS) with increasing its revenue...

Chetan Vanmali & Kagiso Nonyane - Webber Wentzel
How to be tax smart when withdrawing money from a business

In the current global economic climate, it is not often that you find owners of businesses devising the means and modalities of extracting the fruits of their sweat from their businesses. We present three common options available to shareholders for withdrawing money from a business.

Veli Ntombela
The short but not so sweet

The South African sugar tax is set to take off in April 2018. We discuss how the levy works, who it affects and future expansion plans.

Pieter Marais
When may interest be claimed against SARS?

We discuss the process of claiming interest on penalties, interest paid to SARS in protest as well as interest payable on tax refunds.

Jerry Botha & Natasha Wilkinson
Forecasting SA’s Carbon Tax Legal Regime

This article summarises the key points emerging from the Carbon Tax Bills and expresses some views on the carbon tax measures which entities may be liable for and advised to consider putting in place before the carbon tax is implemented.

Mansoor Parker

Tax News In The Press

SA Appoints Head of Regional Brics Bank

[News24Wire] National Treasury on Tuesday announced it has appointed the head of the BRICS New Development Bank for the African Regional Centre.

Ex Revenue Service Heads Accused of Spying on Former Police Unit

[News24Wire] The State's charge sheet against three former SARS officials, alleges that the accused monitored, recorded and transcribed conversations from the former Scorpions.

Watch out for these VAT pitfalls

Amid government efforts to return South Africa to a path of fiscal sustainability, the VAT rate rose from 14% to 15% on April 1. While this means that goods and services that are subject to the standard VAT rate and that were previously sold for R114 (R100 plus R14 VAT) will now set consumers back R115, not all calculations are quite as simple. In fact, some consumers who booked and paid for accommodation in early January or February but only plan to make use of the accommodation after April...

Ingé Lamprecht - Moneyweb
Gerrie Nel, Trevor Manuel, Vusi Pikoli Are State Witnesses in SARS 'Rogue Unit' Case

[News24Wire] The list of witnesses the State will be drawing on in their case against a trio of ex-SARS officials is throwing up names well known during the trial of former police commissioner Jackie Selebi as well as beleaguered SARS executives Tom Moyane and Jonas Makwakwa.

Case Against SARS Executives Postponed

[Daily Maverick] The case against former SARS executives Ivan Pillay, Johann van Loggerenberg and Andries Janse van Rensburg was postponed in the Pretoria Magistrate's on Monday morning until 18 June. They maintain "ulterior agendas" are behind the charges. By GREG NICOLSON.

Sars clarifies its stance on bitcoin

The South African Revenue Service (Sars) will continue to apply “normal income tax rules” to cryptocurrencies such as bitcoin and has urged taxpayers to declare cryptocurrency gains or losses as part of their taxable income.

Ingé Lamprecht - Moneyweb