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SAIT Trending Topics

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
PWC Tax Alert: What you need to know when a third party contacts you on behalf of SARS to recover debt owed

SARS intends on reducing as much as possible of the R16.6 billion debt owed to them by taxpayers by the 28 February 2019 through the use of the 8 debt collection agencies appointed to assist them in recovering the amount owed, this was announced in a media statement released on Friday, 9 March 2018. The purpose of this alert is make taxpayers aware of their rights when receiving calls from such debt collectors.

PWC

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

Guide on US Foreign Account Tax Compliance Act FATCA

In 2010 the United States in an effort to enhance tax compliance by U.S. Persons12 in foreign jurisdictions or those with offshore accounts, introduced the Foreign Account Tax Compliance Act (FATCA) which institutes identification and reporting obligations on Reporting Financial Institutions. 

SARS
Draft Guide on the calculation of the tax payable on lump sum benefits

A person who is or was a member of a retirement fund becomes entitled to a lump sum benefit when his or her membership of that retirement fund terminates. The taxable portion of the lump sum benefit is determined under the provisions of the Second Schedule, which takes into account certain allowable deductions.

SARS
Interpretation Note 35 (Issue 4) – Employees’ tax: personal service providers and labour brokers

This Note discusses the employees’ tax implications as well as the deductions that may be claimed by a personal service provider or a labour broker.

TAX CASES

Income Tax Act: Protocol amending convention between South Africa and Brazil for avoidance of double taxation and prevention of fiscal evasion with respect to taxes on income

Governments to amend the Convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, signed at Pretoria on 8 November 2003 (hereinafter referred to as "the Convention") as published in the Government Gazette of 9 February 2018 p. 109.

Benhaus Mining (Proprietary) Limited v Commissioner of the South African Revenue Services (13863) [2017] ZATC 4 (30 November 2017)

The main issue in this appeal is whether the appellant derived income from mining operations which would have entitled it to the mining capital allowances. 

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.

Legislative & Policy
(National Treasury & Parliament)

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
Comment: Draft Amendments to Regulations prescribing electronic services

The National Treasury and the South African Revenue Service (SARS) invites you to comment on the Draft Amendments to Regulations prescribing electronic services that were announced during the Minister of Finance’s 2018 Budget Speech.  Details about commenting are available here: Draft Amendments to Regulations prescribing electronic services

 

Parliamentary Monitoring Group

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)

Public comments received on misuse of residence by investment schemes to circumvent the Common Reporting Standard

The consultation document assessed how these schemes are used in an attempt to circumvent the CRS; identified the types of schemes that present a high risk of abuse; reminded stakeholders of the importance of correctly applying relevant CRS due diligence procedures in order to help prevent such abuse; and explained next steps the OECD will undertake to further address the issue, assisted by public input.

Better design of taxes on personal savings and wealth is needed to support inclusive growth

The taxation of personal savings and wealth varies widely, offering governments significant scope for tax reforms that simultaneously improve both the efficiency and fairness of their tax systems, according to two new OECD reports.

OECD
Webcast: Register to our live event on Taxing personal savings and wealth to support inclusive growth, Thu 12 April, 16h (CEST)

Join our team of OECD experts on 12 April at 16:00 CEST to discuss the key findings of two new OECD reports which will assess how governments are using the taxation of personal savings and wealth, and offer recommendations for more effective and more efficient tax policy.

OECD

CPD Events

PROFESSIONAL INSIGHT

Lesotho launches Voluntary Disclosure Programme and increases VAT rate

The Minister of Finance, launched a Voluntary Disclosure Programme (VDP) on 6 February 2018 which grants amnesty from prosecution and the imposition of additional taxes on outstanding income tax and value added tax liabilities. The scope of the VDP covers tax liabilities from 1 April 2005.

BDO
ENSafrica tax revenews

Below, please find issue 2 of ENSafrica’s tax revenews, a snapshot of the latest tax developments in South Africa. case law High Court, Western Cape Division: L Taxpayer v CSARS

by the tax department
PWC Synosis March 2018

A monthly journal, published by PwC South Africa, that gives informed commentary on current developments in the tax arena, both locally and internationally. Through analysis of and comment on new laws and judicial decisions of interest, Synopsis helps executives to identify developments and trends in tax law and revenue practice that may affect their business.

PWC
Medical rebate, adjusted today gone tomorrow

The Income Tax Act 58 of 1962 (ITA) was amended in 2012 to provide for a different method of treating medical expenses for individuals. The former system, which allowed for a deduction of medical aid contributions against an individual's taxable income, was replaced by a medical tax credit system (MTC). The MTC consists of the medical scheme fees tax credit (section 6A) and the additional medical expenses tax credit (section 6B).

Wesley Grimm - Webber Wentzel
PWC Alert: SARS’ Diesel Refund Scheme

The diesel refund scheme provides relief from the Fuel Levy and Road Accident Fund (“RAF”) Levy. This relief is available to primary producers in mining, farming, forestry and various other defined sectors in terms of the Customs and Excise Act, 1964 (Act No.91 of 1964) (“the Act”).

Herman Fourie, Hennie Engelbrecht & Johnathan Fillis - Webber Wentzel
SARS releases media statement on the tax treatment of cryptocurrency transactions

On 6 April 2018, the South African Revenue Service (“SARS”), released a media statement regarding its views on the tax treatment of transactions involving cyrptocurrencies in terms of the provisions of the Income Tax Act,1962 and Value-Added Tax (“VAT”) Act, 1991. A high-level overview of the views taken in the media statement are as follows:

by the tax department
SARS issues new guide to understatement penalties - a march toward further certainty?

The Tax Administration Act, No 28 of 2011 (TAA) was promulgated with effect from 1 October 2012. The rationale behind the introduction of the TAA was that it would streamline, modernise and align the previous tax administration provisions to ultimately lower the cost and burden of tax administration in South Africa. One of the key changes to the tax administration regime in South Africa pursuant to the promulgation of the TAA was the conversion from the imposition of “additional tax” by SARS...

Jerome Brink - Cliffe Dekker Hofmeyr
Debt relief measures may provide (some) relief

The proposed debt relief measures in the 2017 amendments to section 19 and paragraph 12A of the Eighth Schedule of the Income Tax Act 58 of 1962 (ITA) did not provide much relief to "assist companies in financial distress", as was the intention in the Explanatory Memorandum to the draft Taxation Laws Amendment Bills, 2017. In fact, the measures appear to have caused more distress due to the financial implications and the legislative uncertainty during the interim period between the...

Joon Chong & Wesley Grimm - Webber Wentzel
Extra-ordinary dividends - share buy-back anti-avoidance

Share buy-backs, if structured in a specific manner, may give rise to the shareholder/seller not being liable to capital gains tax in respect of the disposal of the share on the basis that the proceeds derived by the shareholder/seller in respect of such disposal would be reduced by the amount by which such buy-back transaction gives rise to a dividend. In addition, in circumstances where the shareholder/seller is a South African tax resident company, the share buy-back may be free from...

PKF Durban

Tax News In The Press

Cosatu to Make Submission On VAT Hike Application to Parliament's Finance Committees

[COSATU] COSATU will present its outright and vehement rejection of government's anti-poor VAT hike to Parliament's Finance Committees at 12pm Wednesday, 25 April, E249, New Wing. The federation rejects the VAT hike as anti-poor and a regressive tax that will hit workers the hardest. It comes on the back of other taxes squeezing workers' dwindling wages, e.g. fuel, RAF, sugar sweetened beverages and below inflation adjusted income brackets.

Minister Nhlanhla Nene Appoints Panel of Experts to Review Current List of Vat Zero-Rated Items and Terms of Reference

Minister announces the terms of reference and details of the Independent Panel of Experts to consider and review the current list of vat zero rated items

South African Government
Corporate tax rate in need of review

South Africa’s current rate of 28% is way above that of the global average of 24.29%.

Amanda Visser - Moneyweb
Sars tackles non-compliance with submission of tax returns

Drop in compliance over recent years has been significant.

Amanda Visser - Moneyweb
Treasury Considers Conditional Grants for Scholar Transport

[News24Wire] National Treasury has confirmed it is looking at making changes to the scholar transport funding model in South Africa.

More clarity on tax treatment of bitcoin, but…

The South African Revenue Service’s (Sars) announcement that it considers cryptocurrencies to be intangible assets and not currencies has brought an end to widespread speculation about the nature of cryptocurrencies.

Ingé Lamprecht - Moneyweb