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

Interpretation Note 4 (Issue 5) – Resident: Definition in relation to a natural person – physical presence test

This Note explains the requirements of the physical presence test, with which a natural person, who is not at any time ordinarily resident in the Republic of South Africa during the relevant year of assessment, must comply before that person will be a “resident” as defined in section 1(1).

SARS
Interpretation Note 102 – Classification of risk policy and the once-off election to transfer certain policies or classes of policies issued before 2016 to the risk policy fund

This Note provides guidance on – the interpretation and application of the definition of “risk policy” in section 29A(1); and the once-off election by an insurer to transfer certain policies or classes of policies issued before 1 January 2016 to the risk policy fund under section 29A(13B).

SARS
BCR 063 Income Tax implication of settlement agreement

This ruling determines the treatment of contributions made by employer companies to a trust in terms of a settlement agreement and how the amounts accruing to or received by the trust and the beneficiaries of the trust will be treated.

SARS

TAX CASES

Ruling by Tax Court - Employment exercised in SA in terms of DTA (TCIT 14218)

Whether the foreign income earned by the Appellant is taxable in South Africa.

SARS Court 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

Legislative & Policy
(National Treasury & Parliament)

Latest Published Government Gazette

Click here to read the latest published goverment gazette.

Rentia Janse Van Niewenhuizen - Government Printing
Media Statement: Extension of SARS Acting Commissioner's term

The Minister of Finance, Mr Nhlanhla Nene, has re-appointed Mr Mark Kingon as Acting Commissioner of the South African Revenue Service (SARS) for a further 90 days beginning on June 17.

National Treasury
Carbon Tax Bill: Treasury response to submissions

The Portfolio Committee on Environmental Affairs and the Standing Committee on Finance received a briefing from the National Treasury on its responses to the various comments from various stakeholders on the draft Carbon Tax Bill 2017. In addition, a number of the stakeholders, including a university professor, a non-governmental organisation representative, the Congress of South African Trade Unions (COSATU), the World Wide Fund for Nature (WWF), a Metals SA company and ESKOM,  gave their...

Parliamentary Monitoring Group

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

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
​Income Tax Act, 1962

Draft IN on leasehold improvements. Next due date for comments :​11 May 2018

SARS

International and Regional News
(OECD and ATAF)

Ukraine signs landmark agreement to strengthen its tax treaties

Today, Ukraine signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Convention). Ukraine becomes the 83rd jurisdiction to join the Convention, which will update the existing network of bilateral tax treaties to reduce opportunities for tax avoidance by multinational enterprises.

OECD
OECD Secretary-General Tax Report G20 Finance Ministers, Buenos Aires, Argentina, July 2018

This report contains two parts. Part I is a report on the activities and achievements of the OECD’s tax agenda, and is made of two subparts: looking back at significant achievements and looking ahead at the further progress needed, in particular through the OECD/G20 Inclusive Framework on BEPS. Part II is a Progress Report to the G20 by the Global Forum on Transparency and Exchange of Information for Tax Purposes.

OECD
OECD/IMF Report on Tax Certainty - 2018 Update

This report explores the nature of tax uncertainty, its main sources and effects on business decisions and outlines a set of concrete and practical approaches to help policymakers and tax administrations shape a more certain tax environment.

OECD

CPD Events

PROFESSIONAL INSIGHT

Treasury includes cryptocurrency in draft tax legislation

On 16 July 2018, National Treasury’s draft Taxation Laws Amendment Bill (draft TLAB) was published for public comment. The draft TLAB has encapsulated a first for South African taxpayers by introducing legislative provisions for cryptocurrency in the proposed amendments.

Cliffe Dekker Hofmeyr
Decrypting the law: Proposed VAT Act amendments affecting cryptocurrencies

The former Minister of Finance stated in his Budget Review on 21 February 2018 that the income tax and value-added tax (VAT) treatment of cryptocurrencies are addressed by existing provisions in the South African tax law. Regarding VAT, it was recognised that the supply of cryptocurrencies can cause administrative difficulties in the VAT system; and to address these issues, it was proposed that the VAT legislation be amended. 

Gerhard Badenhorst - Cliffe Dekker Hofmeyr
2018 Legislative cycle: Proposed VAT amendments

The draft Taxation Laws Amendment Bill, 2018 and the draft Tax Administration Laws Amendment Bill were released for public comment on 16 July 2018 and include proposed amendments to the Value-Added Tax Act, 1991.

PWC
A re-prioritising of sorts? Proposals regarding the interaction between the anti-avoidance rules on dividend-stripping and corporate re-organisations

In 2017, the Income Tax Act, No 58 of 1962 (Act) was amended to strengthen the anti-avoidance rules dealing with dividend stripping. The Explanatory Memorandum on the TLAB (Memorandum) states that these anti-avoidance rules were initially introduced in 2009 to curb the use of dividend stripping structures, whereby a resident shareholder company would avoid income tax (including capital gains tax) on the sale of shares, by ensuring that the target company declares a large pre-sale dividend to...

Louis Botha - Cliffe Dekker Hofmeyr
Tax Revenews | Issue 9

Case Law:  Supreme Court of Appeal: CSARS v South African Breweries

By the ENS Tax department
If no tax debt, SARS must pay the refund: An interesting judgment about the TAA’s refund provisions

It is often mentioned by taxpayers that in their opinion, the South African Revenue Service (SARS) delays the payment of refunds to taxpayers. In light of this observation, the judgment in Top Watch (Pty) Ltd v The Commissioner of the South African Revenue Service (Johannesburg Case No: 2017/4557 and Pretoria Case No: 2016/90099) (judgment delivered on 12 June 2018) is particularly interesting.

Louis Botha - Cliffe Dekker Hofmeyr
South Africa's first transfer pricing case?

Section 31 of the Income Tax Act, No 58 of 1962 (Act) contains South Africa’s transfer pricing provisions which constitutes one of the most contentious areas of tax law not only in South Africa, but around the world. Historically, there has been no judicial precedent in South Africa regarding the application of s31 of the Act and in particular the important “arm’s length” principle. However, in Crookes Brothers Ltd v Commissioner for the South African Revenue Service [2018] ZAGPHC...

Jerome Brink - Cliffe Dekker Hofmeyr
What documents do you need before completing your tax return?

This article aims to provide you with a checklist of information and documents required to make your ITR12 completion as painless as possible

Annelie Laage for TaxTalk Magazine
Recent changes to fringe benefits

Fringe benefits seem like a good idea: Things your employer gives you for free. But working out the tax implications of these non-cash payments can be an arduous task. The article discusses the main changes to fringe benefits in recent years.

Rob Cooper for TaxTalk Magazine

Tax News In The Press

Recession threatens revenue and credit rating, Nhlanhla Nene warns

Government will spare no effort to stabilise state-owned entities and create policy certainty in mining, the finance minister tells the Tax Indaba.

Sunita Menon - Business Live
‘Discriminatory tax amendment’ may affect non-bank lenders

The recent Taxation Laws Amendment Bill discriminates between banks and non-bank lenders in the taxation of doubtful debt.

Amanda Visser - Moneyweb
Sars Inquiry: I relied on Moyane’s integrity – Gigaba

Former Finance Minister Malusi Gigaba has told the Nugent Commission of Inquiry that he signed off on a mysterious trip the now suspended Commissioner of the South African Revenue Service (Sars), Tom Moyane, took to Russia in November 2017, even though the Commissioner did not explain what the purpose of the trip was.

Ingé Lamprecht - Moneyweb
Bain under fire at Sars inquiry

International consultancy firm Bain & Company came under fire at the Nugent Inquiry into tax administration and governance at the South African Revenue Service (Sars) on Thursday because it didn’t raise red flags when it won contracts worth R164 million despite the absence of a competitive tender process.

Ingé Lamprecht - Moneyweb
Fuel levy needs a rethink

The fuel levy or tax on each litre of petrol is an important revenue stream for government, but this stream could dry up in the near future, says professor Stephan Krygsman, a transport economics expert in the department of logistics at Stellenbosch University. Krygsman is doing research on the ways in which road users are being taxed and whether these are efficient.

Alec Basson - Moneyweb
Sars inquiry: Who should the Commissioner account to?

The president’s unfettered discretion to appoint a Commissioner for the South African Revenue Service (Sars) came under the spotlight at the Nugent Commission of Inquiry on Wednesday, with a Treasury official arguing that legislation introduced in the wake of 1994 did not foresee a scenario where a “bad” minister or president could be appointed.

Ingé Lamprecht - Moneyweb