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

CLOSURE DURING THE FESTIVE SEASON HOLIDAYS

Kindly be informed that the Office of the Tax Ombud will close from 21 December 2018 until 2 January 2019. We wish you a safe and enjoyable festive season and a happy new year.
 

Tax Ombud
Binding Private Ruling (BPR) 314 – Venture capital company – investment in hotel development

This ruling determines the tax consequences of an investment in a new hotel development by a venture capital company.

SARS
Draft IN on no-value rule in respect of the rendering of transport services by any employer

This Note provides clarity on the no-value provision in respect of the rendering of transport services by an employer to employees in general, and must be read with BGR 42 dated 22 March 2017 “No-value provision in respect of transport services”.

SARS

TAX CASES

CSARS v Respublica (Pty) Ltd (1025/2017) [2018] ZASCA 109 (12 September 2018)

Value-Added Tax Act 89 of 1991 – whether the supply of a building and related goods and services to an educational institution for use by its students under a written agreement ...

SARS Court Cases
ABC (Pty) Ltd and C:SARS (Case number: 13879)

Under-declaration of gross income.

SARS Court Cases
Commissioner for the South African Revenue Service v ABC Holdings Limited (IT14294) (11 July 2018)

Tax Court – Practice – Exception; Rule 32 Statement.

SARS Court Cases

Legislative & Policy
(National Treasury & Parliament)

Comments & public hearings: 2018 Medium Term Budget Policy Statement (MTBPS)

The Standing Committee on Finance and the Select Committee on Finance invites you to submit written submissions on the 2018 Medium Term Budget Policy Statement (MTBPS) that will be tabled on 24 October 2018. Click here to read more.

Parliamentary Monitoring Group
Draft Response documents on the 2018 draft tax bills

The National Treasury today publishes the draft Taxation Laws Amendment Bill, 2018 (TLAB) and draft Tax Administration Laws Amendment Bill, 2018 (TALAB). The TLAB and TALAB include the legislative amendments for the more complex tax proposals that were announced in the 2018 Budget Review on 21 February 2018.

National Treasury
Speech by Minister of Finance Mr. Nhlanhla Nene 2018 Tax Indaba

It is my honour to give this opening address to the 2018 Tax Indaba. Tax policy and tax administration are not usually seen as especially interesting topics in the eyes of the general public, but that has certainly changed after the events of the past few years.

National Treasury

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

​Income Tax Act, 1962

Draft Guide on the calculation of the tax payable on lump sum benefits (Issue 3). Next due date for comments: 29 June 2018 New!​​

SARS
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

International and Regional News
(OECD and ATAF)

At G20 Summit OECD’s Gurría says collective action vital to tackle global challenges

International cooperation and collective action are critical to tackling the world’s major challenges, OECD Secretary-General Angel Gurría said following the G20 Leaders’ Summit held in Buenos Aires amid heightened trade tensions but at which important advances were made on a number of priorities of Argentina’s presidency.

OECD Secretary-General tax report - G20 Leaders Argentina

This report contains two parts. Part I reports on the activities and achievements in the OECD’s international tax agenda. Part II reports on the activities and achievements of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Asian and Pacific economies: decreases in tax revenue highlight need to broaden tax bases

This new report shows that tax-to-GDP ratios fell in most of the 16 Asian and Pacific economies covered by the report between 2015-16 due to a combination of policy reforms and decreasing natural resource prices.

CPD Events

PROFESSIONAL INSIGHT

PWC Tax Alert - Legislative developments: Revisions to the debt relief rules

Section 19 of the Income Tax Act, 1962 (“the Act”) and paragraph 12A of the Eighth Schedule to the Act, which contain the “debt relief” rules, underwent substantial amendment in the 2017 legislative cycle. These amendments gave rise to significant practical problems.

PWC
Legislative developments: The doubtful debt allowance regime

Section 11(jA) of the Income Tax Act, 1962 (Act No. 58 of 1962) (“the Act”) makes provision for a “doubtful debt” allowance for banks (as a class of “covered person” as defined in section 24JB of the Act). In January 2018, section 11(jA) was amended (effective for years of assessment commencing on or after 1 January 2018). These amendments were driven by the coming into effect of IFRS 9, the impairment requirements of which are vastly different from those of IAS39, which preceded IFRS9. The...

PWC
PwC Synopsis - October 2018

The South African Income Tax Act, 1962 (Act No. 58 of 1962), as amended (“the Income Tax Act”), is just that: a single Act of Parliament (assented to and that commenced in 1962) that has been regularly amended (by more than 100 amending Acts of Parliament and Government Notices) since 1962.

PWC
Significant 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. These proposals have now been fleshed out and, while subject to amendment, the parameters of these changes have been clarified. The key details of these tax proposals are summarised below. Introduction of a residency basis of taxationA significant...

by the ENSafrica tax department
Changes to the debt relief provisions from 1 January 2019

The Income Tax Act has always contained rules that give rise to tax implications for debtors whose debts are reduced or eliminated for less than the face value of the debt. These provisions are contained in section 19 and paragraph 12A to the Income Tax Act. Depending on how the proceeds of a debt were utilised or the how the debt arose, the provisions can trigger income tax recoupments, a reduction in the tax cost of assets or both.  Subject to exclusions the debt relief provisions are...

KPMG SA
Retrospective amendments to the debt relief provisions

The Income Tax Act has always contained rules that give rise to tax implications for debtors whose debts are reduced or eliminated for less than the face value of the debt. These provisions are contained in section 19 and paragraph 12A to the Income Tax Act. Depending on how the proceeds of a debt were utilised or the how the debt arose, the provisions can trigger income tax recoupments, a reduction in the tax cost of assets or both.  Subject to exclusions the debt relief provisions are...

KPMG SA
Good news for lenders? Further proposed amendments to the doubtful debt provisions

On 17 October 2018, National Treasury (NT) and the South African Revenue Service (SARS), appeared before Parliament’s Standing Committee on Finance (SCoF) to provide it with a further update regarding some of the proposals contained in the 2018 draft Taxation Laws Amendment Bill (Draft TLAB), that was published earlier this year. One of the key proposals related to the doubtful debt provisions in s11(j) and s11(jA) in the Income Tax Act, No 58 of 1962 (Act), regarding which NT received...

Louis Botha - Cliffe Dekker Hofmeyr
More than one way to skin a cat? High Court considers SARS' power to issue reduced assessments

Under Section 93 of the Tax Administration Act (28/2011), there are five circumstances under which the South African Revenue Service (SARS) may issue a reduced assessment in order to reduce a person's tax liability. While Section 93 makes it possible to 'skin a cat' (ie, reduce tax liability) in more ways than one, taxpayers should be mindful of the requirements that must be met and the correct process to follow in order to achieve the desired result.

Louis Botha - Cliffe Dekker Hofmeyr for International Law Office
National Treasury faces hard choices in this year’s MTBPS

Deloitte Medium-Term Budget Policy Statement (MTBPS) Commentary 2018

Deloitte

Tax News In The Press

Corporate taxpayers pulling their weight easy targets for Sars

While many South African businesses are either not registered for tax or are paying next to no tax, the South African Revenue Service (Sars) is taking a shotgun approach to attacking large tax-compliant corporates, which it seems to see as easy targets.

Kelly Wright - Moneyweb
20 November 2018 - SARS intensifies campaign to reinforce tax compliance
20 November 2018 - SARS intensifies campaign to reinforce tax compliance
SARS intensifies campaign to reinforce tax compliance

The South African Revenue Service (SARS) is once again embarking on a nationwide awareness campaign to remind taxpayers of their obligation to submit outstanding tax returns.

SARS
SARS achieves 30 fraud convictions involving R65 BILLION in 6 months

Between April and September this year, SARS has achieved 30 successful convictions in Value-Added Tax (VAT) - and Personal Income Tax (PIT) fraud cases, involving R65 billion. This represents a 100% success rate in convictions relating to the fraud cases that were investigated by SARS criminal investigators and finalised by the courts during this time, Ms Mogola Makola, Chief Officer of Enforcement, revealed.  In total, the courts finalised 74 cases during this time, which represents the...

SARS
Donations tax: Should I include it on my tax returns?

Donations tax is tax payable at a flat rate on the value of property disposed of by donation. Should it be included in your tax returns? A Fin24 user wanted some advice.

Allison Jeftha - Fin24