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SAIT Trending Topics

Size limit for the upload of supporting documents on eFiling increased

Taxpayers that have to upload supporting documents (relevant material) using eFiling should make sure the documents meet the standards and best practices.

SARS
Tax Operational Workgroups

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 April 2018: Comments on PAYE BRS V17.0

The SARS Business Requirements Specification version 17.0.0 that prescribes the codes and validation rules to be used for both the mid-year (August 2018) and the tax year end (February 2019) tax certificate submissions was issued on 15 March 2018 (see PAGSA Newsflash 201808).

Rob Cooper

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

DTA Hong Kong GG 39444

Agreement between the government of the republic of South Africa and the government of the Hong Kong special administrative region of the People’s Republic of China for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income.

SARS
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
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

S G Taxpayer v Commissioner for the South African Revenue Service (IT14264) [2018] ZATC 1 (9 May 2018)

The central issue in this matter is whether, as the appellant (“the taxpayer”) contends, there is a sufficiently close connection between the contribution of R48 million (“the expense”) paid by it to a certain Trust in respect of its own employee management share incentive scheme (“the scheme”), and its production of income during the 2005 to 2012 years of assessment (“the income”) for purposes of s 11(a) of the Income Tax Act.

SARS Court Cases
TCIT 13492 JHB 01 March 2017

The appellant is an entity called AB CC which made various loans to its related close corporations and companies during the years of assessment which are relevant to this appeal – namely the years 2007 – 2011.

SARS Court Cases
TCIT 13863 JHB 30 November 2017

The appellant conducts business as a “contract miner”. It concludes contracts with third parties who hold mining rights and it undertakes to render certain services to such parties.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Rates and Monetary Amounts and Amendment of Revenue Laws (“VAT”) Bill: Briefing & Public Hearings; Davis Tax Committee

The Standing Committee on Finance, jointly with the Select Committee on Finance, held public hearings on the Rates and Monetary Amounts and Amendment of Revenue Laws Bill. National Treasury highlighted that the Rates Bill was published on Budget Day and dealt with key rate monetary threshold changes, and more complex tax proposals would be dealt with in Tax Laws Amendment Bill (TLAB) and Tax Administration Laws Amendment Bill (TALAB) to be published in July for public comments. Tax proposals...

Parliamentary Monitoring Group
Terms of Reference for the Independent Panel of Experts for the Review of Current List of VAT Zero Rated Food Items

The Value-Added Tax (VAT) rate was increased from 14 to 15 per cent on 01 April 2018, as was announced in the February 2018 National Annual Budget. The increase of the VAT rate by one percentage point is expected to raise additional revenue in the amount of R22.9 billion in 2018/19. The decision to increase the VAT rate was taken to protect the integrity of the public finances by narrowing the budget deficit, stabilising government debt and laying the foundation for new investment and...

National Treasury
Latest SAIT Submissions to National Treasury / SARS / Parliaments Finance Committees

SAIT have commented on various proposed amendments to tax legislation and draft interpretation notes in these submissions made on behalf of our members.

SAIT Tax Policy

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

Mineral and Petroleum Resources Royalty Act, 2008​

Draft IN on the meaning of "bulk" in Schedule 2. Next due date for comments: ​18 May 2018.

SARS
​Income Tax Act, 1962

Draft IN on section 13bis – Deductions in respect of buildings used by hotelkeepers. Next due date for comments: ​11 May 2018

SARS
National Legislation​

2018 Draft Rates and Monetary Amounts and Amendment of Revenue Laws Bill, Draft Amendments to Regulations prescribing electronic services, Consolidated Regulations after Draft Amendments to Regulations prescribing electronic services, Draft Explanatory Memorandum-Regulations prescribing electronic services. Next due date for comments:​ 22 March 2018 New

SARS

International and Regional News
(OECD and ATAF)

Key events during Inclusive Framework on BEPS meeting, on 27-28 June 2018 in Lima, Peru

This two-day event is a key element of the Inclusive Framework, enabling countries to discuss implementation of the BEPS package, in particular the four minimum standards (Harmful Tax Practices, Preventing Treaty Abuse and the Multilateral Instrument, Country-by-Country Reporting, and Improving Dispute Resolution) and feed their perspectives into the global dialogue.

Kazakhstan signs the CRS Multilateral Competent Authority Agreement

Kazakhstan today became the 102nd jurisdiction to sign the OECD's Multilateral Competent Authority Agreement for the Common Reporting Standard (CRS MCAA).

Press events during Inclusive Framework on BEPS meeting, on 27-28 June 2018 in Lima, Peru

This two-day event is a key element of the Inclusive Framework, enabling countries to discuss implementation of the BEPS package, in particular the four minimum standards (Harmful Tax Practices, Preventing Treaty Abuse and the Multilateral Instrument, Country-by-Country Reporting, and Improving Dispute Resolution) and feed their perspectives into the global dialogue.

OECD

CPD Events

PROFESSIONAL INSIGHT

A long-awaited guide on venture capital companies published for comment

The VCC tax regime was introduced into the Income Tax Act, No 58 of 1962 (Act) in 2009 and is aimed at encouraging investment into small and medium-sized enterprises and junior mining companies. Section 12J of the Act encompasses the relevant legislation governing VCCs and provides for the formation of an investment holding company, described as a VCC, where investors subscribe for shares in the VCC (venture capital shares) and claim an income tax deduction for the subscription price...

Gigi Nyanin - Cliffe Dekker Hofmeyr
Urgent reinstatement of tax compliance status granted

For certain taxpayers, a tax clearance certificate is of utmost importance in ensuring that it is able to receive payment and to tender for new services. In the recent Gauteng High Court decision (Red Ant Security Relocation and Eviction Services (Pty) Ltd v CSARS (2999/18)), the taxpayer applied for urgent interdictory relief for reinstatement of its tax compliance status in order to be able to generate a tax clearance certificate pending determination of review proceedings which...

Joon Chong - Webber Wentzel
tax revenews | issue 7

Below, please find issue 7 of ENSafrica’s tax revenews, a snapshot of the latest tax developments in South Africa. case law Tax Court, Johannesburg: IT 13251 & VAT 1077

The ENSafrica Tax Department
The Capital v Revenue question in the context of government grants: The SCA decides in favour of the motor manufacturing industry.

In the recent case of Volkswagen South Africa (Pty) Ltd v Commissioner for South African Revenue Service 80 SATC 179, the age-old question of whether a receipt is capital or revenue in nature was addressed by the Supreme Court of Appeal (SCA), in the context of government grants paid to motor vehicle manufacturers.

Louis Botha and Louise Kotze - Cliffe Dekker Hofmeyr
Africa tax in brief

COMOROS: Treaty with United Arab Emirates enters into forceThe income tax treaty between the Comoros Islands and the United Arab Emirates, signed on 26 March 2015, entered into force on 2 January 2018 and generally applies from 1 January 2019. 

Celia Becker - ENSafrica
Controlled foreign companies: look before you leap

Section 9D of the Income Tax Act, 1962 (the “Act”) is aimed at South African residents who directly or indirectly hold more than 50% of the total participation (broadly speaking shares) or voting rights in a foreign company. A foreign company in this context is classified as a controlled foreign company (“CFC”).In terms of section 9D, the “net income” of the CFC is included in the relevant resident’s income in proportion to the resident’s effective participation rights in that CFC, thus...

Carmen Gers & Simone Krupanandham - ENSafrica
Reducing the cost of transfer pricing compliance for MNEs

Many countries have become more focused on combating tax avoidance. As such, transfer pricing compliance has become much more burdensome due to substantial documentation requirements and multiple filing deadlines. Multinationals (“MNEs”) have to take action to control their transfer pricing risks, but the cost of doing so could substantially increase.Before base erosion and profit shifting (“BEPS”), transfer pricing compliance was mostly local, requiring local transfer pricing documentation...

Okkie Kellerman - ENSafrica
Mauritius Supreme Court sheds some light on priority of tax claims in liquidations

In The Car Company Ltd (in Liquidation) v. The Mauritius Revenue Authority, the Commercial Division of the Supreme Court ruled that the amount of taxes due under the Value Added Tax Act and the Income Tax Act (value-added tax (“VAT”), pay-as-you-earn (“PAYE”) and tax deducted at source (“TDS”)), do not form part of the estate in liquidation and have to be paid to the Mauritius Revenue Authority (“MRA”)...

Xavier Koenig - ENSafrica
Accrual of amount on cession of right to dividends

Generally speaking, dividends paid by South African companies are exempt from income tax in the hands of shareholders. The dividends may, however, be subject to dividends tax, subject to certain exemptions.

Ben Strauss - Cliffe Dekker Hofmeyr

Tax News In The Press

'It Is My Obligation to Share the Untold Truth' - Makwakwa Wants to Testify Before SARS Inquiry

[News24Wire] Former acting SARS chief operations officer Jonas Makwakwa says he wants to testify before the commission of inquiry into the tax body because he watched "lies being told to the innocent citizens of our country".

There is no need to fear filing tax returns

Tax filing season opens on Sunday and you may be wondering whether you need to bother with the often-dreaded task of filing a tax return.

Charlene Clayton - Sowetan Live
SARS ditches drop boxes and certain printed forms

The South African Revenue Service (SARS) will remove drop boxes for the submission of income tax returns and other paper documents, in its drive to encourage taxpayers to use eFiling for all tax transactions where possible. 

SARS
Rogue Unit Allegations Hogwash, Former SARS Enforcement Head Tells Inquiry

[News24Wire] The former head of SARS enforcement Gene Ravele told the commission of inquiry into affairs at the tax agency that allegations over the so-called 'rogue unit' were nothing but hogwash.

Suspended Revenue Service Chief Accused of Costing Nation U.S.$10 Billion

[Daily Maverick] The deep destruction Tom Moyane's reign inflicted on SARS, and the country, came into focus on Tuesday when four top former SARS managers explained the circumstances which led to their leaving the institution. Moyane will have to weather a plethora of accusations by former SARS officials under oath - including that SARS' revenue stream was manipulated in an attempt to achieve the revenue target. This is how Day Two of the Nugent Commission of Inquiry into SARS unfolded - it...

Culture of Fear at South African Revenue Services, Inquiry Hears

[News24Wire] Listening devices and cameras were planted all over the SARS offices in Pretoria after Tom Moyane was appointed as commissioner in 2014, the SARS commission of inquiry heard on day two of proceedings.