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

Interpretation Note 43 (Issue 7) – Circumstances in which certain amounts received or accrued from the disposal of shares are deemed to be of a capital nature

This Note provides clarity on the interpretation and application of section 9C, which deems the amount derived from the disposal of specified shares held for a continuous period of at least three years to be of a capital nature

SARS
Income Tax Act, 1962

Two Interpretation Notes were uploaded:

  • Interpretation Note 109 – Lease agreements
  • Interpretation Note 110 – Leasehold improvements
SARS
Tax Practitioner Connect January 2019

SARS gratefully acknowledges the support from the tax practitioner community in 2018 and hope that we will continue to work together towards increased compliance and fiscal citizenship in 2019.

SARS

TAX 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
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

Legislative & Policy
(National Treasury & Parliament)

BUDGET 2019

The Minister of Finance, Hon. Tito Titus Mboweni will table the 2019 Budget in Parliament on 20 February 2019 at 2pm. All the documents relating to the MTBPS, including the Minister's speech, will be available on this website as soon as the Minister starts speaking in Parliament. 

 

National Treasury
Budget Tips

The Minister of Finance would like to hear your thoughts, ideas and tips for the 2019 Budget. Click here to submit your tip.

 

National Treasury
Media statement: Warning regarding scammers

The Ministry of Finance would like to warn the public about scams which purport to be communication from the Ministry. In the latest of these scams, a person purporting to be the Deputy Minister of Finance has been asking people on Facebook for money in return for funding their projects or business plans. This person also asks for people’s full names, ID numbers, as well as home addresses. Neither the Ministry nor National Treasury assists individuals or businesses with the funding of their...

National Treasury

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

​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
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

International and Regional News
(OECD and ATAF)

OECD announces progress made in addressing harmful tax practices (BEPS Action 5)

Further progress has been made by the OECD/G20 Inclusive Framework on BEPS in implementation of BEPS measures against harmful tax practices (BEPS Action 5).

Ireland deposits its instrument of ratification for the Multilateral BEPS Convention

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

International community makes important progress on the tax challenges of digitalisation

The international community has made important progress toward addressing the tax challenges arising from digitalisation of the economy and has agreed to continue working multilaterally towards achievement of a new consensus-based long-term solution in 2020, the OECD announced today.

OECD

CPD Events

PROFESSIONAL INSIGHT

Share repurchases and dividend stripping: Where are we?

We look at dividend stripping, anti-avoidance provisions and the state of play in disposing of shares in a deferral transaction.

Heinrich Louw - TaxTalk Magazine
Policy formulation and the 4 seasons of tax law

The cyclic tax law process, much like the seasons, is ever changing, but how exactly it changes can seem mysterious. SAIT’s CEO and former National Treasury insider explains the overall legislative process and then takes a closer look at how policy is formulated.

Keith Engel - TaxTalk Magazine
ITR14 must-knows

This article takes us through the process of accessing and completing the ITR14 return on eFiling.

Maya Nikolova - TaxTalk Magazine
Interest in the production of income

Since section 24O of the Income Tax Act came into effect in January 2013, interest incurred in respect of certain debts is deemed to be in the production of “income” and therefore tax deductible. Our article looks at subsequent changes and considers possible further amendments.

Esther Van Schalkwyk - TaxTalk Magazine
Foreign services exemption: Where are we now?

Over a year has passed since the bombshell dropped that rocked the expatriate community and advisors alike and yet there still seems to be little in the way of clarity around the operationalisation of the “new” section 10(1)(o)(ii) as it now stands.

Tarryn Atkinson - TaxTalk Magazine
PWC Tax Alert - Dutch “Most Favoured Nation”

Regular readers of our Tax Alerts will recall our previous Alert dated 4 September 2017 (Dividends Tax and Double Taxation Agreements: Dutch Most Favoured Nation Clause) (“the previous Alert”). In the previous Alert, we drew the attention of readers to the “most favoured nation” clause in the double taxation agreement between the Netherlands and South Africa (“the SA-Netherlands DTA). For some time, many taxpayers have taken the position that this clause (“the Dutch MFN clause”) can (when...

PWC
Is your tax objection late? Here’s what to do

SARS raises additional assessments all the time and for various reasons but mostly, an additional assessment, whether it be on VAT, income tax or PAYE is raised by SARS following an audit/verification.

Nico Theron - Unicus Tax Specialists SA
PWC Tax Alert - Fixed non-compliance penalties on Corporate Income Tax returns implemented

Government Notice No. 1372, published in Government Gazette No. 42100, provides for the imposition of fixed amount penalties in terms of sections 210 and 211 of the Tax Administration Act, 2011 (Act No. 28 of 2011) in respect of corporate income tax (“CIT”) returns.

PWC
SA tax penalties on companies

On 14 December 2018, the public notice that allows the South African Revenue Service (“SARS”) to impose penalties on companies for not submitting income tax returns was gazette. This is a new addition to the legion of penalties already faced by companies and permits the imposition of a monthly penalty on a company ranging from anything between R250 to R16 000 a month.

Nico Theron - Unicus Tax Specialists SA

Tax News In The Press

Little room for higher taxes, plenty for improvement

Now is a good time for Mboweni to act on recommendations, tax practitioners say.

Amanda Visser - Moneyweb
Tax revenue could miss mini-budget forecast by more than R10bn

Tax revenue for the current fiscal year could fall short of the medium-term budget policy statement (MTBPS) forecast by at least R10 billion after corporate and personal income tax collection slowed in the last few months of 2018.

Ingé Lamprecht - Moneyweb
Appointment of Sars commissioner imminent

Finance minister Tito Mboweni has appointed a panel to interview candidates and to recommend a suitable candidate for the top job at the South African Revenue Service (Sars).

Ingé Lamprecht - Moneyweb
Is SA’s corporate tax rate too high?

There have been calls to lower South Africa’s corporate income tax rate to improve the country’s relative competitiveness and to ignite economic growth.

Ingé Lamprecht - Moneyweb
What’s next for tax-free savings accounts?

Almost four years have passed since National Treasury introduced tax-free savings accounts (TFSAs) to improve South Africa’s dismal savings rate.

Ingé Lamprecht - Moneyweb
Sars under pressure to flex its muscles

The South African Revenue Service (Sars) is likely to come under increasing pressure to improve efficiency and up its enforcement efforts in the year ahead.

Ingé Lamprecht - Moneyweb