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

Draft Rule Amendments on Carbon Tax

Environmental levy in respect of carbon tax imposed in terms of the Carbon Tax Act, 2019

TAX OMBUD NAMES ACTING CEO

The Tax Ombud Judge Bernard Ngoepe, following the imminent departure of Advocate Eric Mkhawane, announced the appointment of Mr Gert van Heerden Senior Manager Legal Services as acting Chief Executive Officer (CEO) with effect from 1 May 2019.

Tax Ombud
MEDIA STATEMENT: SARS & OFFICE OF THE TAX OMBUD SIGN HISTORIC AGREEMENT

The South African Revenue Service (SARS) and Office of Tax Ombud (OTO) signed a historic agreement to forge an effective working relationship that will deliver excellent service to the taxpayer.

Tax Ombud

TAX CASES

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
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

Legislative & Policy
(National Treasury & Parliament)

Carbon Tax Bill: finalisation & voting; Financial Matters Amendment Draft Bill: briefing

The Committee met with the National Treasury for finalisation and adoption of the Carbon Tax Bill. The Committee also received a briefing and discussed the Financial Matters Bill.

Parliamentary Monitoring Group
Media Advisory: Save the date - Media Workshop

As part of equipping journalists with information to help them with their reporting of the Budget and related issues, Treasury will host a media workshop on 19 February 2019. Details of what will be presented at the workshop will follow in due course.

Treasury
Media statement: Publication of the 2018 Tax Acts and Accompanying Documentation

The President has signed into law three 2018 tax bills, that give legislative effect to the tax proposals announced by the Minister of Finance in his annual National Budget Speech delivered on 21 February 2018.

  • Rates and Monetary Amounts and Amendment of Revenue Laws Act, 2018 (Act No. 21 of 2018) (2018 Rates Act)
  • the Taxation Laws Amendment Act, 2018 (Act No 23 of 2018) (2018 TLAA) and
  • the Tax Administration Laws Amendment Act, 2018 (Act No 22 of 2018) (2018...
National Treasury

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

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
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

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

Today, Luxembourg deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting with the OECD’s Secretary-General, thus underlining its strong commitment to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational enterprises.

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

CPD Events

PROFESSIONAL INSIGHT

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
Cliffe Dekker Hofmeyr - Special Edition: Budget Speech Alert

Our experts' views on today's Budget Speech.

Cliffe Dekker Hofmeyr
Cliffe Dekker Hofmeyr: Tax & Exchange Control Alert 15 February 2019

SALE OF LEASE RIGHTS AND LEASE PREMIUM: The tax treatment of lease premiums continues to be a vexing issue.

A DIVER’S QUANDARY: THE ROLE OF DOMESTIC LAW IN INTERPRETING DOUBLE TAXATION AGREEMENTS: In the international tax law arena, agreements for the avoidance of double taxation (DTAs) are, very simply, concluded between states with a view to prevent, mitigate or discontinue the levying of tax in respect of the same income, profits or gains or tax imposed in respect of the same...

Cliffe Dekker Hofmeyr
Africa tax in brief

AFRICAN UNION: African Continental Free Trade Area Agreement developments

Celia Becker - ENSafrica

Tax News In The Press

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
Expat tax: Financial emigration could cost you - and it's not so simple, experts warn

South Africans working abroad should not opt for financial emigration as a knee-jerk reaction to new expatriate tax laws, cautions Gavin Smith, global financial solutions firm deVere Acuma's head in Africa.

Carin Smith
SA extends its Vat net to cover the globe

The scope of regulation pertaining to the value-added tax (Vat) treatment of electronic services supplied by a foreign company to a South African company or individual has widened.

Amanda Visser