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

SCAM EMAIL ALERT: DON’T OPEN OR FORWARD TO ANYONE, DELETE IT IMMEDIATELY!

We are aware of a scam email in circulation that appears to be from South African Revenue Service and linked with the Office of the Tax Ombud email address. Take note that it is not from Office of the Tax Ombud email address. The Office of the Tax Ombud will never ask you to click on a link or a download any documents.

Tax Ombud
Clearance of movements
Skills development levy exemption - public benefit organisations

This Note provides guidance on the interpretation and application of section 4(c) of the SDL Act,1 which exempts any PBO2 contemplated in section 10(1)(cN) from the payment of SDL, provided the PBO – • solely carries on qualifying PBAs; or • solely provides funds to PBOs that solely carry on qualifying PBAs.

SARS

TAX CASES

CSARS v Amawele Joint Venture CC (908/2017) [2018] ZASCA 115 (19 September 2018)

VAT – zero rating of supplies of services in terms of s 11(2)(s), read with s 8(23) of the Value-Added Tax Act 89 of 1991 – whether supplies made in terms of the Housing Subsidy Scheme referred to in s 8(23).

SARS Court 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

Legislative & Policy
(National Treasury & Parliament)

Media Statement: Release for public comment: Report by the Independent Panel on the review of the current list of zero-rated VAT items

The Minister of Finance today releases the report by the Independent Panel on the review of the current list of items that are zero-rated for VAT purposes for public comment by 31 August 2018. The Minister appointed the panel after the announcement in the budget in February of the increase in the rate of value-added tax (VAT) from 14 to 15 per cent effective from 1 April 2018. 

National Treasury
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

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

INVITATION FOR COMMENT ON THE DRAFT ANTI-AVOIDANCE OF TAX BILL, 2018

The Anti-Avoidance of Tax Bill aims to give SARS the necessary legal mechanisms to tackle aggressive and illegal avoidance.

Government Gazette
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

International and Regional News
(OECD and ATAF)

Asian and Pacific economies: decreases in tax revenue highlight need to broaden tax bases

This new report shows that tax-to-GDP ratios fell in most of the 16 Asian and Pacific economies covered by the report between 2015-16 due to a combination of policy reforms and decreasing natural resource prices.

Latin American Ministers launch regional initiative to combat tax evasion and corruption

This week, in the margins of the 11th Global Forum meeting held in Punta del Este, Uruguay Minister of Economy and Finance Danilo Astori led a discussion with Ministers, high level representatives and officials from Latin America on the use of information exchange to combat tax fraud and corruption.

Global Forum on Tax Transparency marks a dramatic shift in the fight against tax evasion with the widespread commencement of the automatic exchange of financial information

The Global Forum held its annual meeting in Uruguay on 20-22 November, bringing together 220 delegates from 84 jurisdictions and 12 International organisations to strengthen further the international community’s fight against tax evasion. The meeting marked the widespread rollout of automatic exchange of financial account of information.

CPD Events

PROFESSIONAL INSIGHT

The exemption of scholarships or bursaries awarded to disabled employees

An exemption came into effect in 2018 which provides income tax relief for scholarships and bursaries awarded to disabled persons for study purposes. What are the requirements for recipients and for employers that provide funding for disabled employees?

Jaco Faber & Herman Viviers for TaxTalk Magazine
Doing your objection right

When initiating a dispute with SARS it is important to start off on a solid foundation. Our author provides ways to get it right.

Suzanne Smit for TaxTalk Magazine
Disputes and the SARS Service Charter

Disputes between taxpayers or practitioners and SARS: We ask what has changed since the publication of the SARS Service Charter.

 

Elle-Sarah Rossato for TaxTalk Magazine
PWC Tax Alert - Legislative developments: Revisions to the debt relief rules

Section 19 of the Income Tax Act, 1962 (“the Act”) and paragraph 12A of the Eighth Schedule to the Act, which contain the “debt relief” rules, underwent substantial amendment in the 2017 legislative cycle. These amendments gave rise to significant practical problems.

PWC
Legislative developments: The doubtful debt allowance regime

Section 11(jA) of the Income Tax Act, 1962 (Act No. 58 of 1962) (“the Act”) makes provision for a “doubtful debt” allowance for banks (as a class of “covered person” as defined in section 24JB of the Act). In January 2018, section 11(jA) was amended (effective for years of assessment commencing on or after 1 January 2018). These amendments were driven by the coming into effect of IFRS 9, the impairment requirements of which are vastly different from those of IAS39, which preceded IFRS9. The...

PWC
PwC Synopsis - October 2018

The South African Income Tax Act, 1962 (Act No. 58 of 1962), as amended (“the Income Tax Act”), is just that: a single Act of Parliament (assented to and that commenced in 1962) that has been regularly amended (by more than 100 amending Acts of Parliament and Government Notices) since 1962.

PWC
Significant new Namibian tax law proposals

In the Namibian Budget Speech held in March 2018, far-reaching reforms to the Namibian tax system were proposed, promising to substantially change the basis of taxation in Namibia and impact existing and new business transactions in the country. These proposals have now been fleshed out and, while subject to amendment, the parameters of these changes have been clarified. The key details of these tax proposals are summarised below. Introduction of a residency basis of taxationA significant...

by the ENSafrica tax department
Changes to the debt relief provisions from 1 January 2019

The Income Tax Act has always contained rules that give rise to tax implications for debtors whose debts are reduced or eliminated for less than the face value of the debt. These provisions are contained in section 19 and paragraph 12A to the Income Tax Act. Depending on how the proceeds of a debt were utilised or the how the debt arose, the provisions can trigger income tax recoupments, a reduction in the tax cost of assets or both.  Subject to exclusions the debt relief provisions are...

KPMG SA
Retrospective amendments to the debt relief provisions

The Income Tax Act has always contained rules that give rise to tax implications for debtors whose debts are reduced or eliminated for less than the face value of the debt. These provisions are contained in section 19 and paragraph 12A to the Income Tax Act. Depending on how the proceeds of a debt were utilised or the how the debt arose, the provisions can trigger income tax recoupments, a reduction in the tax cost of assets or both.  Subject to exclusions the debt relief provisions are...

KPMG SA

Tax News In The Press

20 November 2018 - SARS intensifies campaign to reinforce tax compliance
SARS intensifies campaign to reinforce tax compliance

The South African Revenue Service (SARS) is once again embarking on a nationwide awareness campaign to remind taxpayers of their obligation to submit outstanding tax returns.

SARS
SARS achieves 30 fraud convictions involving R65 BILLION in 6 months

Between April and September this year, SARS has achieved 30 successful convictions in Value-Added Tax (VAT) - and Personal Income Tax (PIT) fraud cases, involving R65 billion. This represents a 100% success rate in convictions relating to the fraud cases that were investigated by SARS criminal investigators and finalised by the courts during this time, Ms Mogola Makola, Chief Officer of Enforcement, revealed.  In total, the courts finalised 74 cases during this time, which represents the...

SARS
Donations tax: Should I include it on my tax returns?

Donations tax is tax payable at a flat rate on the value of property disposed of by donation. Should it be included in your tax returns? A Fin24 user wanted some advice.

Allison Jeftha - Fin24
The use of special trusts

The South African Revenue Service (Sars) recognises the use of trusts for purposes other than wealth transfer, and specifically for persons with disabilities and minor children who are not able to produce enough income to take care of themselves, and who also cannot take care of themselves. Sars introduced the concept of a special trust to bring about more favourable tax treatment for such trusts.

Phia van der Spuy - IOL
Ire over verification demands

A day doesn’t go by without Tax Consulting South Africa being contacted by a frustrated taxpayer who has experienced a delay in his or her VAT refund from the South African Revenue Service (Sars), said Christopher Renwick, an attorney at Tax Consulting SA. This is more than a year after the Tax Ombud, Judge Bernard Ngoepe, issued a rather critical report on the Sars VAT refund structure. “Perhaps the report has fallen on deaf ears,” he said.

Christopher Renwick - IOL