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SAIT Trending Topics

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

Reporting and Conveyance of Goods
Application to Submit Cargo Reports
The ABC of Capital Gains Tax for Individuals

TAX CASES

TCIT 13626 JHB 17 May 2018

Income Tax; trading stock; whether there was a diminution in value of the Appellant’s trading stock for the relevant years of assessment.

SARS Court Cases
Red Ant Security Relocation Services (Pty) Ltd and Commissioner of SARS

(Case no. 2999/18) The applicant sought urgent interdictory relief aimed at reinstatement of its tax compliance status so that it can generate a tax clearance certificate pending the determination of review proceedings instituted by it.

SARS Court Cases
TCIT 13251 and VAT 1077 JHB 16 May 2018

​Income Tax & VAT; full bench (3 judges) of the Tax Court i.t.o section 118(5) of the TAA; estimated assessments based on extrapolation of 7 month data; Commissioner concedes that the amount of assessments needs to be reduced prior to appeal hearing commencing without altering the assessments accordingly; under-declaration of income and turnover through the intentional manipulation of taxpayer’s point of sales system (POS);   additional tax 200 %.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Media Statement: Release for public comment: Report by the Independent Panel on the review of the current list of zero-rated VAT items

The Minister of Finance today releases the report by the Independent Panel on the review of the current list of items that are zero-rated for VAT purposes for public comment by 31 August 2018. The Minister appointed the panel after the announcement in the budget in February of the increase in the rate of value-added tax (VAT) from 14 to 15 per cent effective from 1 April 2018. 

National Treasury
Comment & Public Hearing: 2018 TLAB & TALAB

The Standing Committee on Finance invites public comment on the 2018 Draft Taxation Laws Amendment Bill (TLAB) and the 2018 Draft Tax Administration Laws Amendment Bill (TALAB).  Both draft Bills give effect to the tax proposals announced on Budget Day (21 February 2018), as published in the Budget Review.

Parliamentary Monitoring Group
Media Statement: VAT Panel Report

The Chair of the Independent Panel of Experts for the review of the current list of VAT zero-rated items, Professor Ingrid Woolard, today requested from the Minister of Finance an extension of today’s deadline for the submission of its report. The Minister has agreed to extend the deadline from 31 July 2018 to 6 August 2018. The report will be made public soon thereafter.

National Treasury

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

Income Tax Act, 1962  

Draft IN 93 (Issue 2) –​ The taxation of foreign dividends. Next due date for comments: 29 June 2018.

SARS
Income Tax Act, 1962  

Draft IN 93 (Issue 2) –​ The taxation of foreign dividends. Next due date for comments: 30 June 2018 New!​

SARS
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

International and Regional News
(OECD and ATAF)

Ecuador joins international efforts against tax evasion and avoidance

The OECD Headquarters in Paris, Marisol Andrade, Director-General of the Internal Revenue Service of Ecuador, signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Convention) in the presence of the OECD Deputy Secretary-General Ludger Schuknecht. Ecuador is the 126th jurisdiction to join the Convention.

OECD
Grenada joins the Inclusive Framework on BEPS

The Inclusive Framework on BEPS welcomes Grenada bringing to 123 the total number of countries and jurisdictions participating on an equal footing in the Project.

OECD and CIAT join forces in promoting stronger tax systems

The OECD and the Inter-American Center of Tax Administrations (CIAT) hosted today the high-level event "Base Erosion and Profit Shifting Implementation: Strategic importance, challenges and opportunities" in Lisbon, Portugal.

CPD Events

PROFESSIONAL INSIGHT

What costs can taxpayers deduct in pursuance of installing solar energy systems?

It is beyond doubt that South Africa enjoys sunshine more than most places on earth. The South African Department of Energy (DoE) states on its website that the majority of regions in South Africa average more than 2,500 hours of sunshine per year, and average solar-radiation levels range between 4.5 and 6.5kWh/m2 in one day.

Jerome Brink - Cliffe Dekker Hofmeyr
The Tax Ombud’s Report is in and the results are few. Is the office of the Tax Ombud doing its job?

Following the lead of international best practices, the South African OTO is modelled on the Tax Ombud systems of Canada, the United States of America and the United Kingdom and is required to promote its mandate as set out in s16 of the TAA. 

Jessica Carr - Cliffe Dekker Hofmeyr
Back to basics: Navigating a SARS audit and dispute process

Receiving and responding to a request for relevant material from the South African Revenue Service (“SARS”) and generally dealing with SARS during an audit or a dispute can be a daunting task for any taxpayer. In this article, we go back to basics in briefly discussing the processes followed by SARS during audits and disputes (up to the appeal stage), including providing some tips and insights in dealing with SARS in these processes, which may assist taxpayers in navigating their way through...

Taryn Solomon - ENSafrica
Welcome tax proposals to the debt relief rules

When debt is reduced or written off, certain adverse tax consequences may arise for the debtor. The tax provisions dealing with the debt relief rules are contained in section 19 and paragraph 12A of the Eighth Schedule to the Income Tax Act, 1962 (the “Act”). The current debt relief rules were introduced by the Taxation Laws Amendment Act, 2017 and are applicable in respect of years of assessment commencing on or after 1 January 2018. The trigger for the application of these debt relief...

Lavina Daya & David Marais - ENSafrica
Africa tax in brief

ANGOLA: Double tax agreement with Portugal signedThe Double Tax Agreement (“DTA”) between Portugal and Angola was signed in Luanda in September 2018. Reportedly, the DTA will enter into force in 2019 following compliance with all the constitutional formalities by both countries. KENYA: 2018 Finance Act assented toThe Finance Act 2018 received presidential assent on 21 September and was gazetted on the same day as Act No. 10 of 2018. The Finance Act largely confirmed the proposals under the...

Celia Becker - ENSafrica
Drastic new Namibian tax law proposals

In the Namibian Budget Speech held in March 2018, far-reaching reforms to the Namibian tax system were proposed, promising to substantially change the basis of taxation in Namibia and impact existing and new business transactions in the country. The key details of these tax proposals are summarised below. Introduction of a residency basis of taxationA significant proposal relates to the introduction of a residency basis of taxation which will apply to “residents” of Namibia as defined with...

Peter Dachs & Lavina Daya
Webber Wentzel Event: Panel discussion on dispute resolution issues

Dispute resolution complaints rank as the second most common category of complaints received by the Office of the Tax Ombud (OTO), with more than 700 complaints (almost 30% of total complaints) received in the 2017/2018 year. Non-payment of refunds is the most common complaint with more than 800 complaints in 2017/2018 (almost 35% of total complaints), and the refunds complaints often have a dispute component. The OTO, with the approval of the Minister of Finance, is currently conducting a...

Webber Wentzel
Disallowance of the utilisation of an assessed loss

In the recent case of Commissioner for the South African Revenue Service v Digicall Solutions (Pty) Ltd(927/2017) [2018] ZASCA 137 (28 September 2018), the Supreme Court of Appeal (SCA) was requested to consider whether the Commissioner for the South African Revenue Service (Commissioner) was correct in disallowing the utilisation by Digicall Solutions (Pty) Ltd (Taxpayer) of certain assessed losses, in terms of s103(2) of the Income Tax Act, No 58 of 1962 (Act).

Gigi Nyanin - Cliffe Dekker Hofmeyr
Interest-free loans to trusts: Proposed amendments, public comments & National Treasury’s response

In the 2018 draft Taxation Laws Amendment Bill, 2018 (Draft TLAB), published on 16 July 2018, it was proposed that s7C of the Income Tax Act, No 58 of 1962 (Act) should be further amended, to broaden the scope of the provision. The proposed amendment relates specifically to s7C(1)(ii)(bb).

Louis Botha - Cliffe Dekker Hofmeyr

Tax News In The Press

Parliamentary body says budget targets likely to be missed

The parliamentary budget office, which provides independent advice to parliament’s finance and appropriations committee, said on Tuesday that it expects the Treasury to miss its fiscal consolidation target for the year, with a budget deficit of 4%.The estimate is in line with broader expectations with credit ratings agency Moody’s, for example, reporting last week that it expected a deficit of 4% against the Treasury’s estimate in February of 3.6%.The estimates come ahead of the tabling of...

Carol Paton - Business LIve
Salary increases mainly get pocketed by the taxman

Employed South Africans, on average, received R15,299 in September, interbank payment service BankservAfrica said on Tuesday.Following August’s 4.7% jump, caused by government employees receiving their annual pay increases backdated to April, the growth in average take-home pay slowed to 2.2% in September.If inflation is taken into account, the average annual growth of South African salaries after tax and other expenses has only been 0.5% for the past five years, Economists.co.za chief...

Robert Laing - Business Live
Old hand Mboweni is likely to stick with Nene’s measured approach

Barely three weeks into the job, Finance Minister Tito Mboweni’s first medium-term budget policy statement will be a baptism of fire. The statement, most of which was drafted under the leadership of former finance minister Nhlanhla Nene, has a lot riding on it.The medium-term budget is a plan of the government’s strategic spending priorities over the next three years. After a disastrous medium-term budget was presented in 2017, the pressure is mounting.Mboweni, who was the Reserve Bank...

Sunita Menon - Business Live
Designing a new Sars

Speaking at the Nugent Commission of Inquiry into tax administration and governance at the South African Revenue Service (Sars) on October 19, acting Sars commissioner Mark Kingon touched on how Sars can be strengthened. He stressed that Sars does not act in isolation, but is part of a global community.

Barbara Curson - Moneyweb
Tax increases unlikely in 2019, according to PwC report

South Africans could be saved from tax increases in 2019, a report from PricewaterhouseCoopers (PwC) suggests.The report comes a week before Finance Minister Tito Mboweni delivers the medium-term budget policy statement in parliament. According to PwC, the Treasury is largely expected to maintain its February forecast for tax revenues for 2018-19.While a downward revision for corporate income tax is expected, it will be largely offset by an upward revision for value-added tax (VAT) and...

Sunita Menon
Lesetja Kganyago warns of high cost of risky, inflation-boosting economic policies

SA cannot take huge risks that drive up inflation and the country’s borrowing costs in order to boost growth and job creation, warns Reserve Bank governor Lesetja Kganyago.“People ask, ‘wouldn’t it be worth taking big risks, having more inflation, borrowing as much as we can get away with, if only we could get some growth and some jobs?’ They even say, ‘in a highly unequal country like SA, wouldn’t it be politically safer to take macroeconomic risks to try and get poverty and unemployment...

Sunita Menon - Business Live